Is income from Superstructure built on leased land taxable as House Property Income?
A. Yes. As the assessee is the owner of the superstructure, the income from such property is taxable as income from house property. Q. What is the annual value of a house property? A. Though tax under the head `Income from house property’ is tax on income, yet it is not a tax on rents but on the inherent capacity of a building to yield income. The standard selected as a measure of the income to be taxed is annual value, which is deemed to be the sum for which the property might reasonably be expected to be let out from year to year. Q. How is annual value for a house property calculated? A. The procedure for calculating the annual value is as follows: • Find out the gross annual value, which will be the maximum of the following three: a) municipal value (gross); b) actual rent, and c) fair rent, i.e., rent of similar properties in the same or similar locality. • Deduct the municipal taxes borne and paid by the owner from the gross annual value computed above. Q. What are the deductions
