Section 23

Annual value how determined.

23. (1) For the purposes of section 22, the annual value of any property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year :

Provided that where the property is in the occupation of a tenant, the taxes levied by any local authority in respect of the property shall to the extent such taxes are borne by the owner, be deduced in determining the annual value of the property :

¹[Provided further that the annual value as determined under this sub-section shall,—

(a) in the case of a building comprising one or more residential units, the erection of which is begun after the 1st day of April, 1961 and completed before the 1st day of April, 1970 for a period of three years from the date of completion of the building, be reduced by a sum equal to the aggregate of—

  (i) in respect of any residential unit whose annual value as so determined does not exceed six hundred rupees, the amount of such annual value;

 (ii) in respect of any residential unit whose annual value as so determined exceeds six hundred rupees, an amount of six hundred rupees;

(b) in the case of a building comprising one or more residential units, the erection of which is begun after the 1st day of April, 1961 and completed after the 31st day of March, 1970, for a period of five years from the date of completion of the building, be reduced by a sum equal to the aggregate of—

  (i) in respect of any residential unit whose annual value as so determined does not exceed one thousand two hundred rupees, the amount of such annual value;

 (ii) in respect of any residential unit whose annual value as so determined exceeds one thousand two hundred rupees, an amount of one thousand two hundred rupees,

so, however, that the income in respect of any residential unit referred to in clause (a) or clause (b) is in no case a loss.]

¹[(2) Where the property consists of one or more houses and such house or houses is or are in the occupation of the owner for the purposes of his own residence, the annual value of such house or where there are two such houses, the annual value of each such house or where there are more than two such houses, the annual value of two of such houses (which the assessee may, at his option, specify in this behalf) shall first be determined in the same manner as if the property had been let and further be reduced, in each case, by one-half of the amount so determined or one thousand eight hundred rupees, whichever is less :

Provided that where the sum so arrived at exceeds ten per cent of the total income of the owner (the total income for this purpose being computed without including therein any income from such property and before making any deduction under Chapter VIA), the excess shall be disregarded.

Explanation 1.—Where any such residential unit as is referred to in the second proviso to sub-section (1) is in the occupation of the owner for the purposes of his own residence, nothing contained in that proviso shall apply in computing the annual value of that residential unit.

Explanation 2.—Where any such property as is referred to in this sub-section consists of more than two houses, the annual value of the houses other than those the annual value of which is required to be determined under this sub-section shall be determined under sub-section (1) as if such houses had been let]".

(3) Where the property referred to in sub-section (2) consists of one residential house only and it cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him, the annual value of such house shall—

(a) if the house was not actually occupied by the owner during the whole of the previous year, be taken to be nil, or

(b) if the house was actually occupied by the owner for a fraction of the previous year, be taken to be that fraction of the annual value determined under sub-section (2) :

Provided that the following conditions are in either case fulfilled:—

  (i) the house is not actually let, and

 (ii) no other benefit therefrom is derived by the owner.

 

 

[As amended by Finance (No. 2) Act, 1971 and Taxation Laws (Amendment) Act, 1970]