Co-Owned Property: How Income Is Taxed (Section 24, Income Tax Act 2025)

When a property is co-owned and each owner's share is definite and ascertainable, section 24 of the Income Tax Act 2025 says the co-owners are not assessed as an association of persons. Each co-owner computes income from the property separately, in proportion to their share, and includes it in their own total income. The self-occupied house relief under section 21(6) is also given to each co-owner individually.

The text below follows the Act as amended by the Finance Act, 2026, for tax year 2026-27. Last reviewed on 10 November 2026. Section 24 itself is only two sub-sections long, so this guide also draws on sections 20, 21 and 22, which hold the actual computation rules. This is information, not tax advice.

How is income from a jointly owned house taxed?

Section 24(1) has three parts:

• The property is co-owned and each owner has a definite and ascertainable share.
• The co-owners are not assessed as an association of persons (AOP). There is no separate tax return for the group.
• Each co-owner's income is computed separately under this Part (the house property provisions) as per their respective share, and is included in that co-owner's total income.

"Income from house property" is the head under which the annual value of buildings and the land appurtenant to them, owned by the assessee, is charged (section 20(1)). Section 24 tells you that for a shared property, "owned by the assessee" means the assessee's own share.

What does "definite and ascertainable share" mean?

The Act does not define the phrase beyond using it. In practice it means the ownership shares can be stated and proved, for example from the sale deed, a registered partition or a will: 50:50, 60:40, or one-third each. If the documents leave the shares open, section 24(1) is not available on its own words, and the treatment of that property should be reviewed before returns are filed.

How is each co-owner's income worked out?

Each co-owner follows the usual house property steps, on their own share:

1. Annual value is the higher of the reasonably expected rent and the actual rent received or receivable (section 21(1)). If the property was vacant for part of the year and actual rent is lower, the actual rent is the annual value (section 21(2)).
2. Reduce it by local authority taxes actually paid by the owner during the tax year (section 21(3)).
3. Deduct 30% of the annual value (section 22(1)(a)).
4. Deduct interest on borrowed capital used to acquire, construct, repair, renew or reconstruct the property (section 22(1)(b)), and pre-construction interest in five equal instalments (section 22(1)(c)).

Rent that the owner cannot realise is left out of actual rent, subject to rule 21 (the tenancy must be bona fide, the defaulting tenant must have vacated or steps taken to make them vacate, the tenant must not occupy any other property of the owner, and the owner must have taken all reasonable steps to sue for the rent or satisfy the Assessing Officer that legal proceedings would be futile). See our guide to annual value and the standard deduction for the full computation.

Worked example 1: let-out flat shared 60:40

Assumptions for tax year 2026-27: Ravi owns 60% and Meena 40% of a flat let to one tenant at Rs 30,000 a month. Actual rent is higher than the reasonably expected rent, so annual value is the actual rent. The owners together paid Rs 12,000 of local taxes and Rs 1,50,000 of interest on a joint loan, each bearing their ownership share.

Step	Whole property	Ravi (60%)	Meena (40%)
Rent for the year (30,000 x 12)	Rs 3,60,000	Rs 2,16,000	Rs 1,44,000
Less: local taxes paid (section 21(3))	Rs 12,000	Rs 7,200	Rs 4,800
Annual value after taxes	Rs 3,48,000	Rs 2,08,800	Rs 1,39,200
Less: 30% (section 22(1)(a))	Rs 1,04,400	Rs 62,640	Rs 41,760
Less: interest (section 22(1)(b))	Rs 1,50,000	Rs 90,000	Rs 60,000
Income from house property	Rs 93,600	Rs 56,160	Rs 37,440

Ravi's Rs 56,160 and Meena's Rs 37,440 add up to Rs 93,600. Each amount goes into that person's own total income and is taxed at that person's own slab.

How does the self-occupied house relief work for co-owners?

Under section 21(6), the annual value of a house is taken as nil if the owner occupies it for their own residence or cannot actually occupy it for any reason. Section 24(2) says this relief is provided as if each co-owner is individually entitled to it. So each co-owner can claim nil annual value on their own, instead of the relief being shared out among them.

The limits in section 21(7) still apply to each co-owner: the relief covers only two houses that the assessee specifies, and it does not apply if the house, or any part of it, is actually let at any time in the tax year, or if the owner derives any other benefit from it.

For such houses, the interest deduction is capped by section 22(2). The cap is Rs 2,00,000 if the property was acquired or constructed with borrowed capital, the acquisition or construction was completed within five years from the end of the tax year in which the capital was borrowed, and the assessee has a certificate from the lender. In any other case the cap is Rs 30,000. Section 22(5) limits the total across all such houses to Rs 2,00,000. These caps are written for the assessee, so each co-owner applies them on their own return.

Worked example 2: self-occupied flat, two co-owners

Assumptions for tax year 2026-27: Anil and Sunil own a flat 50:50 and both live in it. The loan was taken for the purchase and the flat was completed within five years of the year of borrowing. Each has a lender's interest certificate. Total interest for the year is Rs 3,40,000, paid half by each. Neither has any other house property income.

Item	Anil	Sunil
Annual value (section 21(6))	Nil	Nil
Interest paid by the co-owner	Rs 1,70,000	Rs 1,70,000
Cap (section 22(2)(a), conditions met)	Rs 2,00,000	Rs 2,00,000
Interest allowed (lower of the two)	Rs 1,70,000	Rs 1,70,000
Income from house property	Rs (1,70,000) loss	Rs (1,70,000) loss

If the conditions in section 22(2)(a) were not met (say there was no lender certificate), the cap would drop to Rs 30,000 and each brother's loss would be Rs 30,000. Set-off and carry forward of such a loss are covered in our guide to house property loss set-off.

Real-life example 1: siblings who inherit a rented house

Kavita and her two brothers inherit their father's rented house, and the will says one-third each. The shares are definite, so under section 24(1) there is no AOP. Each sibling reports one-third of the rent, one-third of the local taxes paid, and their own 30% deduction on their own return. If Kavita's brothers are in a higher slab, that affects only their own tax, not hers.

Real-life example 2: one spouse pays the whole EMI

Suresh and his wife Anita buy a flat in joint names, 50:50, but Suresh's salary pays the entire EMI. Section 24 fixes how income is split by share. It does not say how interest should be split when one owner services the loan, so the claim should follow the ownership share and the loan terms, backed by the lender's certificate and bank statements. This is a point to settle with your CA before filing, not something to guess.

What are the common mistakes with co-owned property?

• Reporting the whole rent in one name when the ownership documents split it. Section 24(1) requires each co-owner to be assessed on their own share.
• Filing as an AOP for a property with definite shares. The section says the co-owners are not assessed as an AOP.
• Claiming the interest cap as one pool for the whole house, when the caps are applied by each assessee on their own return.
• Claiming nil annual value on a part-let house. If any part is actually let during the year, section 21(7)(b) takes the relief away for that house.
• Losing the interest certificate. Without it, the cap for a self-occupied house is Rs 30,000, not Rs 2,00,000 (section 22(2)).
• Specifying more than two houses for nil annual value. Section 21(7)(a) allows two.

Quick reference

Question	Answer	Where
Are co-owners an AOP?	No, if shares are definite and ascertainable	Section 24(1)
Whose income is it?	Each co-owner, per respective share	Section 24(1)
Standard deduction	30% of annual value	Section 22(1)(a)
Self-occupied relief for co-owners	Each co-owner individually entitled	Section 24(2), section 21(6)
Houses eligible for nil annual value	Two, as specified by the assessee	Section 21(7)(a)
Interest cap, self-occupied, conditions met	Rs 2,00,000	Section 22(2)(a)
Interest cap, other cases	Rs 30,000	Section 22(2)(b)
Total cap across self-occupied houses	Rs 2,00,000	Section 22(5)

Where this is in the Act

• Section 20(1): income from house property is charged on the annual value of buildings and appurtenant land owned by the assessee.
• Section 21(1) to (4): annual value, vacancy, local taxes, unrealised rent. Rule 21: conditions for unrealised rent.
• Section 21(6) and (7): nil annual value for self-occupied houses, limited to two houses.
• Section 22(1), (2), (5): 30% deduction, interest deduction and its caps.
• Section 24(1) and (2): co-owners with definite shares are assessed separately; relief under section 21(6) is individual.

For a CA firm, the difficult part of co-owned property is the paperwork: share records, lender certificates and which co-owner claims what across several client returns. Finexo's practice management software keeps client documents and filing tasks in one place so these items are tracked per client. It does not compute tax or file returns for you.

If the rented flat in your family is also subject to TDS, read TDS on rent under the Income Tax Act 2025.