Section 24 of the Income Tax Act

Income-tax Act, 2025: s.22

Section 24 of the Income-tax Act, 1961 corresponds to section 22 (Deductions from income from house property) of the Income-tax Act, 2025.

Read section 22 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 24 is Chennai Properties & Investments Ltd. v. CIT (373 ITR 673), cited in 381 of the 701 judgments on BharatTax that turn on this section.

Leading authorities on Section 24

Chennai Properties & Investments Ltd. v. CIT
373 ITR 673 · 2015 · Supreme Court
381
citing judgments

Income from immovable property, such as unsold flats or shops, held by an assessee as stock-in-trade in their business of acquiring and holding properties is taxable as 'business income' and not 'income from house property'. Consequently, notional annual letting value under Section 23 cannot be attributed to such stock-in-trade.

ICDS Ltd. v. CIT
350 ITR 527 · 2013 · Supreme Court
280
citing judgments

An assessee engaged in the business of hire purchase or leasing, being the lessor, is entitled to claim depreciation on assets leased out, even if the assets are registered in the name of the lessee and used by the lessee.

CIT v. Malayalam Plantations Ltd.
53 ITR 140 · 1964 · Supreme Court
201
citing judgments

The expression "for the purpose of business" is wider in scope than "for the purpose of earning profits" and encompasses expenditures made for commercial expediency, business preservation, administration, and modernization.

Shambhu Investment (P) Ltd. v. CIT
263 ITR 143 · 2003 · Supreme Court
181
citing judgments

Income derived from letting out property along with incidental use of furniture, fixtures, and common facilities is assessable as 'income from house property' and not 'business income' when the prime object is merely to let out and not to exploit the property as a business asset.

Sultan Bros. (P) Ltd. v. CIT
51 ITR 353 · 1964 · Supreme Court
148
citing judgments

Income derived from letting out property is classified as business income only if the letting activity constitutes a business from a businessman's perspective, rather than mere exploitation of property by an owner. The company's object clause is not the sole determinative factor in this assessment.

East India Housing and Land Development Trust Ltd. v. CIT
42 ITR 49 · 1961 · Supreme Court
147
citing judgments

Rental income from immovable property owned by an assessee must be assessed under the head 'Income from House Property' (Section 22), even if the assessee is engaged in the business of real estate or property development and leasing. This emphasizes the mandatory classification of income under its specific statutory head.

S.G. Mercantile Corporation P. Ltd. v. CIT, Calcutta
83 ITR 700 · 1972 · Supreme Court
126
citing judgments

Income from sources not falling under any other head of income under Section 14 of the Income Tax Act is taxed under the residuary head 'income from other sources'. If income cannot be taxed under Section 45 (capital gains), it cannot be taxed at all.

Raj Dadarkar & Associates v. ACIT
394 ITR 592 · 2017 · Supreme Court
107
citing judgments

The object clause in a partnership deed is not determinative of the head under which rental income is to be assessed; income from letting out shops and stalls developed by the assessee may still be classified as 'Income from House Property' rather than 'Profits and Gains of Business'.

Rayala Corporation Pvt. Ltd. v. ACIT
386 ITR 500 · 2016 · Supreme Court
89
citing judgments

If an assessee company's main business object is to acquire and rent out properties, the rental income derived is taxable as 'Profits and gains of business or profession', rather than 'Income from house property', as the nature of the activity constitutes a business.

Universal Plast Ltd. v. CIT
237 ITR 454 · 1999 · Supreme Court
69
citing judgments

Income received by an assessee from leasing or letting out assets, whether categorized as lease amount, rent, or license fee, is a mixed question of law and fact to determine if it falls under 'Profits and gains of business or profession'. No precise test exists, and the determination must consider the perspective of a businessman, the specific facts, and the true interpretation of the letting agreement.

Judgments on Section 24

The Indian Film Combine P.Ltd, Mumbai vs. Principal Commissioner of Income Tax 16, Mumbai

In the result, the appeal of the assessee is hereby ordered to be allowed

ITA 1985/MUM/2019[2014-15]Status: DisposedITAT Mumbai13 Sept 2019AY 2014-15

Bench: Shri M. Balaganesh, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.1985/Mum/2019 (ननधधारण वर्ा / Assessment Years: 2014-15) बनधम/ The Indian Film Combine Principal Commissioner Of Income-Tax-16 Pvt. Ltd. Vs. Room No.442, Aayakar 1St Floor, Maker Tower „F‟ Bhawan, M.K. Road, Cuffe-Parade, Mumbai- Mumbai. 400005. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. :Aaaci3611E (अपीलाथी /Appellant) (प्रत्यथी / Respondent) .. Assessee By: Shri Prakash Jothwani (Ar) Revenue By: Shri Awungshi Gimson (Dr) सुनवाई की तारीख / Date Of Hearing: 06/08/2019 घोषणा की तारीख /Date Of Pronouncement: 13/09/2019 आदेश / O R D E R Per Amarjit Singh, Jm: The Assessee Has Filed The Present Appeal Against The Order Dated 31.01.2019 Passed By The Principal Commissioner Of Income Tax, Mumbai [Hereinafter Referred To As The “Pcit”] Relevant To The A.Y.2014-15 In Which The Principal Commissioner Of Income Tax Has Invoked The Provisions U/S 263 Of The I.T. Act, 1961. 2. The Assessee Has Raised The Following Grounds: - “I. The Principal Commissioner Of Income Tax -16 ("Hereinafter Referred To As The Pcit"), Ignoring The Relevant Facts On Record, Has Erred In Passing Order Under Section 263 Of The Income Tax Act, 1961 By Holding That The Assessment Order Passed By The Ito 16(1)(5) ("Hereinafter Referred To As The Learned Ao") U/S 143(3) Of The Act Dated 26.12.2016 Is Erroneous So As To Be Prejudicial To The Interest Of The Revenue & Directing The Ao To Decide All The Issues Afresh. The Appellant Submits That The Order U/S.263 Of The Act For Modifying The Order U/S.143(3) Of The Act Is Bad In Law, Illegal, Ultra-Virus, In Excess Of And/Or In Want Of Jurisdiction & Otherwise Void. 2. The Pcit Failed To Appreciate That The A.O. While Passing Order U/S 143(3) Has Considered The Facts Of The Case & Had Taken The Legally Correct View. The Pcit Erroneously Observed That There Is At Least Some

For Appellant: Shri Prakash Jothwani (AR)For Respondent: Shri Awungshi Gimson (DR)
Section 143(1)Section 143(2)Section 143(3)Section 263