Section 22 of the income- tax act, speaks about Income from house property.

The yearly price of assets including any building or lands appurtenant thereto of which the assessee is the owner, apart from such portions of such property as he may occupy for the purposes of any business or profession carried on through him the profits of which might be chargeable to income-tax, will be chargeable to earnings-tax underneath the top ‘profits from house belongings’.

• Building or land appurtenant thereto: The scope of this head of profits is restricted to the income from homes or lands appurtenant (attached or situated inside the vicinity of constructing) to homes handiest. Buildings include residential homes, bungalows, docks, warehouses, any block of bricks or stone paintings protected with the aid of a roof and many others. The land which isn't appurtenant to any homes does not come inside the scope of this section.
• Annual cost: That the means of word ‘annual price’ may be very considerable because the annual price of the constructing or land appurtenant thereto is to be taxed and no longer the hire obtained. The yearly price is to be determined according to the provisions of phase 23 of the profits-tax act. These are discussed later in this bankruptcy.
• The assessee must be the owner of the property. It's far only the proprietor of the residence assets who may be taxed below this head of income. The tax underneath this phase is in respect of the legal or useful proprietor and not the profession or possession of residence assets. Therefore, profits from subletting might be chargeable beneath the head earnings from other assets and now not under residence belongings. So simplest the proprietor can be legal or deemed proprietor, is at risk of tax under this head of profits, except the house property is used by him for the purposes of his own enterprise or profession.

The question of ownership can be noted within the following cases:

• If the land is taken on a lease (long-time) and an extraordinary-shape built, the individual that takes land on rent might be treated as its proprietor.
• Where the assets are mortgaged, it is the mortgager alone and not the mortgagee who can be dealt with as the owner.
• Someone whose assets are vested inside the custodian of evacuee assets isn't always the ‘proprietor’ thereof for the purposes of this phase.
• Wherein the assesses takes a building on rent and he is deriving a few profits via subletting or re-letting, this profits might be taxable below the head earnings from other sources’ and not underneath the top ‘income from residential property.
• In case homes were constructed by way of a cooperative constructing society and allotted or leased out to its participants, the member shall be deemed to be the owner of the homes or element thereof, as the case may be.

In one of the cases, the Supreme Court decided that the owner must be a person who can exercise the rights of the owner, not on behalf of the owner but as his own right.