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CMA Intermediate · Direct and Indirect Taxation · Income from House Property

A builder, Shree Realty Ltd., holds a completed flat as stock-in-trade and has not let it at any time. Under the Income-tax Act, 2025 as amended with effect from 1 April 2026, how is the annual value of this flat treated?

The annual value is nil up to two years from the end of the financial year in which the completion certificate is obtained from the competent authority. This applies only while the stock-in-trade property is not let; afterwards the usual annual value rules apply.

  1. ANil up to two years from the end of the financial year in which the completion certificate is obtainedCorrect
  2. BNil for an unlimited period until the flat is sold
  3. CTaken at expected rent from the date of completion
  4. DNil for one year from the date of completion

Explanation

For property held as stock-in-trade and not let at any time in the tax year, the annual value is nil up to two years from the end of the financial year in which the completion certificate is obtained from the competent authority. After that period the normal rules apply. An unlimited nil period is incorrect.

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