Income from House Property Part-3 (Sec 22 and 24 IT Act)

In this series of posts, we have been covering the tax awareness on Income from House property (Sec-22 and Sec-24 of IT Act). We have covered 2 parts till now and we are covering the 3rd and ultimate part today.

Part-1 : Sec-22 : Basis of Charge (House Property)

Part-2 : Sec-24 : Income from Let House Property

Part-3 : Sec-24 : Income from Self Occupied Property (current post)

In the last two posts, we essentially studied the following:
Part-1 : Sec -22 of Income Tax Act which talks about what is considered a house property and what kind of taxes are applicable on the same.
Part-2 : We studied Sec-24 of IT Act. Once you have a taxable house property which is worthy of generating income for you, we must understand the applicability of Sec-24 for a rented out property.

The applicability of Sec-24 is covered under two sections (and hence Part-2 and Part-3 of this series of posts)

So, lets read on the Computation of Income from a self-occupied Property.

Income from House Property Part-2 (Sec 22 and 24 IT Act)

In the last post(Income from House Property Part-I (Sec 22 and 24 IT Act)), we studied essentially about Sec -22 of Income Tax Act which talks about what is considered a house property and what kind of taxes are applicable on the same.

Today, in Part-2 of this series of posts on "Income from House Property", we would study Sec-24 of IT Act. Once you have a taxable house property which is worthy of generating income for you, we must understand the applicability of Sec-24.

The applicability of Sec-24 is covered under two sections (and hence Part-2 and Part-3 of this series of posts)

This series of posts:

Part-1 : Sec-22 : Basis of Charge (House Property)

Part-2 : Sec-24 : Income from Let House Property (current post)

Part-3 : Sec-24 : Income from Self Occupied Property (next post)

So, lets read on the Computation of Income from Let House Property

Income from House Property Part-I (Sec 22 and 24 IT Act)

As your wealth grows, so is your tax liability. Hence, understanding of tax laws can play a critical role in paying the correct taxes. Income Tax laws can be sometimes very complex but if we understand the intent behind the specific law, it becomes all the more easier to interpret, understand and follow these laws.

"Income from House Property" is one of the most often misunderstood laws in Indian Income Tax Laws. Very often, we confuse it with the rental income, loan interest and many other such misconstrued notions. We are going to deal with this specific section of the IT act under a series of posts starting today.

Today, we deal with Part-I which is understanding the fundamental meaning of this Income Tax law under Section 22 of the IT Act, which deals with understanding the meaning of "Income from House Property".

Quick decision making

Decisions must be taken after giving enough thought to them. While that is true for most decisions, it has also been observed that most of the landmark decisions are instant, taken with gut feel, involves emotions and mostly lack the "thinking time" that is normally advisable to be associated with any decision making process.

Let me tell you a small story to exemplify what i am trying to say.

What is a Stock Split

In our recent post, we studied about the Bonus Issue.

To summarize, what we read
Share-holders get bonus shares from company's earnings in compensation of dividend. But we also realized that the overall wealth of the shareholder does not increase because of the drop in share price post the bonus issue.

Most readers seem to have some confusion about whether bonus issue and stock splits are the same or not.  They may appear to be the same especially in the eyes of a person not well-versed in finance. But they are, in fact, two different things.

Implement the change that you want to see

Yes, we must listen, read, see, visualize, learn, understand and also appreciate the things the way they ought to be, but we must also remember that for any change to happen, you must take a very important next step and that is "to act" towards the change that you want to see in the world around you.

Very often, we spend a lot of time in all the aspects of reading, listening, visualizing, understanding but just halt at the step of "acting". While all of these is important, failure to act turns out to be the single biggest reasons why your ideas and thoughts do not take the shape of reality.

What is a Bonus Issue?

Stocks reward you in many ways. Apart from the regular interest free dividends and the capital appreciation on the stock value, investments in company shares also fetch you certain non monetary benefits to you. Bonuses and Rights issue are two such noticeable benefits.

Let us understand in detail about the Bonus issue.