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

Ravi owns a building, part of which he occupies for running his own consultancy, the profits of which are chargeable to tax. Under the Income-tax Act, 2025, how is the portion occupied for the profession treated?

The portion Ravi occupies for his profession is excluded from the house property charge, because section 20(2) provides that section 20(1) does not apply to portions occupied by the assessee for business or profession whose profits are taxable.

  1. AIts annual value is chargeable as house property income at 30% less
  2. BIt is excluded from the house property charge under section 20Correct
  3. CIt is charged under house property but the interest deduction is disallowed
  4. DIt is charged under house property only if the profession is loss-making

Explanation

Section 20(2) states that the charge under section 20(1) does not apply to portions the assessee occupies for his business or profession, whose profits are chargeable to tax. Such portion therefore falls outside house property. The other options invent partial charges or conditions not in the section.

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