Section 25 — Interpretation. Successor to s.27 of the 1961 Act.
Section 25 is in Chapter IV — Computation of Total Income, which runs from section 13 to section 95.
The section is a definition provision working only for sections 20 to 24. It extends "owner" in relation to a property or any part of it beyond the registered legal owner, through five categories.
Clause (a) brings in an individual who transfers property without adequate consideration to a spouse — except under an agreement to live apart — or to a minor child other than a married daughter. Clause (b) brings in the holder of an impartible estate, deemed the individual owner of all properties comprised in it. Clause (c) brings in a member of a co-operative society, company or other association of persons to whom a building or part of one is allotted or leased under a house building scheme. Clause (d) brings in a person allowed to take or retain possession of a building in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882.
Clause (e) brings in a person acquiring rights in or with respect to a building, excluding rights by way of a lease from month to month or for a period not exceeding one year. Sub-clause (i) covers rights acquired by sale or exchange, or an original or extendible lease for a term of not less than twelve years; sub-clause (ii) covers rights arising from any transaction — including membership of or shares in a co-operative society, company or association of persons, or any agreement or arrangement of whatever nature — that is not a sale, exchange or lease and that has the effect of enabling the enjoyment of the property.
Income from house property is charged on the owner, so a definition confined to registered title would let the charge be sidestepped by arrangements that hand over enjoyment without transferring title. The section treats economic ownership as ownership for sections 20 to 24, and keeps the transferor to a spouse or minor child on the hook. The lease exclusions keep short tenancies out, so an ordinary tenant is not turned into an owner.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Lease term that does not make the holder an owner | A lease from month to month, or for a period not exceeding one year | Rights acquired by way of such a lease are expressly excluded from clause (e) | Clause (e), opening words |
| Lease term that does make the holder an owner | Not less than twelve years | An original or extendible lease acquired by transfer of the building or its part | Clause (e)(i) |
The person who must return the annual value under sections 20 to 24 is often not the person on the title deed. A flat allottee under a society scheme is the owner whether or not the society has conveyed anything, and a purchaser in possession under a section 53A contract is the owner though the sale deed is unregistered. Clause (a) works the other way: the transferor who gave property to a spouse or minor child for inadequate consideration remains the owner, so the income does not move with the gift. Clause (e) turns on the character of the right, not its label — sub-clause (ii) reaches any agreement or arrangement of whatever nature enabling enjoyment of the property, while the opening exclusion keeps monthly and one-year tenancies outside.
An individual is allotted a flat by a co-operative housing society under its house building scheme and moves in, but the society has executed no conveyance in his favour. He lets the flat out. Under clause (c) he is the owner for sections 20 to 24, so the annual value is charged in his hands and not in the society's, and the absence of a conveyance is no answer. Had he instead taken the same flat on an eleven-month tenancy, the exclusion in clause (e) would keep him outside the definition.
In the computation of income from house property in the return, and in any scrutiny query or assessment order asking in whose hands the annual value should be charged — typically where title has not been conveyed, where a property was gifted to a spouse or minor child, or where possession was taken under an unregistered agreement.
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)
a person who is allowed to take or retain possession of any building or part thereof in part performance of a contract
See the full 1961 to 2025 concordance.