Co-ownership – Section 26
Meaning of Co-owner – When the property is owned by two or more person, they are known as co-owners.
If their respective shares are definite and ascertainable then the income from House Property shall be calculated as per the general provision and then apportioned amongst each co-owner as per their definite share. However, deduction under section 24b for interest shall allowed separately if the house property is self occupied by each of the co-owner.
If the share of each person is not ascertainable then the Income shall be assessed as Association of Persons.
Case 1 – Where house property is owned by co-owner and self occupied by each of co-owner
Where the house property owned by the co-owners is self occupied by each of the co-owner, the annual value of the such property for each of such of co-owner shall be nil and each of the co-owner shall be entitled to the deduction of Rs. 30,000/ 1,50,000 under Section 24(b) on account of interest on borrowed money.
Case 2 – Where house property is owned by co-owner and entire or part of the property is let out
The income from such property or part thereof shall be first computed as if this property or part thereof is owned by one owner and thereafter the income so computed shall be apportioned amongst each co-owner as per their definite share.