TaxSaral

Section 20 · was Section 22 in the 1961 Act

House Property — Charging Section

Income from buildings or land appurtenant to them, of which the taxpayer is the owner, is taxed under this head based on the annual value of the property.

Who it applies to: Owners of residential or commercial property who receive rent or have a deemed rental income.

Key points

  • Only the owner is taxed — even if a co-owner receives the rent, each co-owner is taxed on their proportionate share.
  • If you own more than 2 self-occupied properties, only 2 can have nil annual value; additional properties are taxed as let-out.
  • Deemed rent (annual value) applies even to vacant properties (other than the ones declared self-occupied).
  • The actual rent is not always the taxable figure — see Section 21 for how annual value is computed.

Worked example

Owner with one rented and one self-occupied flat

Ananya owns two flats. Flat A in Mumbai (she lives in it), Flat B in Pune (rented at ₹25,000/month). How is each taxed?

Flat A (self-occupied):
  Annual value = Nil (self-occupied)
  No income, no tax

Flat B (let out):
  Gross annual value = ₹25,000 × 12 = ₹3,00,000
  Less: Municipal taxes paid = ₹15,000
  Net annual value (NAV) = ₹2,85,000
  Less: 30% standard deduction (Sec 22) = ₹85,500
  Less: Home loan interest (if any)
  Income from House Property = ₹1,99,500 (before loan interest)

Result: Ananya pays zero tax on her self-occupied flat in Mumbai. She pays tax on ₹1,99,500 from the Pune flat (at her slab rate), reduced further by any home loan interest on that flat.

Related sections

Not sure how Section 20 applies to you? Ask a question or browse all sections.

Section references are based on the Income Tax Act 2025 (Tax Year 2026-27). Examples are illustrative; verify with a Chartered Accountant before filing.