Interpretation

Section 25 — Interpretation

Old Act equivalent: Section 27 of IT Act 1961 Sub-part: C.—Income from house property

Statutory Text

For the purposes of sections 20 to 24, the “owner” in relation to a property or any part thereof shall include—

(a) an individual who transfers without adequate consideration, any property to the spouse (except under an agreement to live apart), or to a minor child (other than a married daughter);

(b) the holder of an impartible estate, and he shall be deemed to be an individual owner in respect of all the properties comprised in the estate;

(c) a member of a co-operative society, company or other association of persons to whom a building or part thereof is allotted or leased under a house building scheme of the society, company or association;

(d) a person who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882);

(e) a person who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or its part—

(i) by virtue of transfer of such property by way of sale or exchange or original or extendible lease for a term of not less than twelve years;

(ii) accruing or arising from any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement of whatever nature), not being a transaction by way of sale, exchange or lease which has the effect of enabling the enjoyment of such property.

Sub-sections

This section has no sub-sections — it is a single interpretation clause with items (a) to (e).

Provisos

None.

Explanations

None.

Tables

None.

Key Structure

• Applies to: Sections 20 to 24 — all house property provisions
• Deemed owners include:
  • (a) Transfer to spouse/minor child: Individual who transfers property without adequate consideration to spouse (except under separation agreement) or minor child (other than married daughter) — the transferor remains the deemed owner (anti-avoidance + clubbing link)
  • (b) Impartible estate holder: Holder of an impartible estate is deemed individual owner of all properties in the estate
  • (c) Co-operative/company allottee: Member of co-operative society, company, or AOP to whom a building is allotted or leased under a house building scheme
  • (d) Part performance possession: Person in possession under section 53A of Transfer of Property Act (agreement to sell, part performance)
  • (e) Rights in building: Person acquiring rights (excluding short-term lease ≤1 year) in a building — by sale, exchange, long-term lease (≥12 years), or any transaction enabling enjoyment of the property
• Exclusions from (e): Month-to-month leases or leases not exceeding one year

Cross-References

• s020-charging — Section 20: charging section — requires “owner”; this section expands who is “owner”
• s021-annual-value — Section 21: annual value computation (applies to deemed owners)
• s024-co-owners — Section 24: co-ownership provisions
• _index — Clubbing provisions: clause (a) aligns with income clubbing for transfers to spouse/minor child
• Section 53A of Transfer of Property Act, 1882 — Part performance contract (referenced at clause (d))

Amendment Notes

None noted from the extracted pages.

Practical Notes

• Clause (a) is an anti-avoidance provision linked to the clubbing provisions: if an individual transfers property to spouse or minor child without adequate consideration, the transferor is still the deemed owner and the income is taxed in the transferor’s hands.
• “Except under an agreement to live apart” — if spouses are separated under a formal agreement, the transfer to the spouse takes effect and the transferor is not deemed owner.
• “Other than a married daughter” — transfer to a married minor daughter is effective (the transferor is not deemed owner).
• Clause (c) is critical for co-operative housing societies: the member-allottee is the deemed owner even though the society may hold the legal title.
• Clause (d) (part performance) brings within the tax net persons who have paid consideration and taken possession under an agreement to sell, even without registered conveyance.
• Clause (e) catches persons who acquire enjoyment rights through indirect means (e.g., acquiring shares in a company that owns property, or joining an AOP that holds property).
• The twelve-year lease threshold in clause (e)(i) distinguishes long-term leases (deemed ownership) from short-term leases (not deemed ownership).