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CS Executive · Tax Laws and Practice · Income under the Head House Property

Meera, the owner of a residential house, lets out part of it to a tenant. Under the Income-tax Act, 2025, under which head is this letting income chargeable?

Letting income from a residential house or part of it by the owner is chargeable only under the head Income from house property. Section 26(4) expressly keeps it out of business income, and the assessee has no choice of head.

  1. AProfits and gains of business or profession, if rent is regular
  2. BIncome from other sources, as it is rent received
  3. CIncome from house property onlyCorrect
  4. DEither house property or business, at the assessee's option

Explanation

Section 26(4) says income from letting out a residential house or part of it by the owner is not included in business income and is chargeable only under house property. Hence there is no option of the assessee, and income from other sources does not apply.

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