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

Under the Income-tax Act, 2025, which of the following is the correct statement about income from letting out a residential house by its owner?

Income from letting out a residential house or part of it by its owner is chargeable only under the head Income from house property. Section 26(4) of the Income-tax Act, 2025 expressly excludes it from business income, and the assessee cannot choose another head.

  1. AIt is chargeable only under the head Income from house property and not under Profits and gains of business or professionCorrect
  2. BIt is chargeable under Profits and gains of business or profession if the owner lets out several houses
  3. CIt is chargeable under Income from other sources whenever the rent is received in cash
  4. DIt may be chargeable under any head the assessee chooses

Explanation

Section 26(4) provides that income from letting out a residential house or a part of it by the owner is not included in business income and is chargeable only under Income from house property. The number of houses let out does not change this rule, and the assessee has no choice of head.

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