Property Owned by Co-owners

Section 24 — PROPERTY OWNED BY CO-OWNERS

Section 24 governs the income-tax treatment of property co-owned by two or more persons whose shares are definite and ascertainable. Each co-owner's share is computed and assessed separately — the co-owners are NOT taxed as an Association of Persons (AOP). This proportionate-share rule allows each co-owner to exercise the s. 21(2)/(3) self-occupation election independently — meaning a co-owner family can effectively claim more than two NIL-annual-value houses across different family members.

STATUTORY ARCHITECTURE

The 'definite and ascertainable shares' precondition is critical — where shares are NOT definite (e.g., HUF property or coparcener interest in unpartitioned HUF), the income falls under the HUF assessment, not co-ownership. The shares may be unequal — e.g., 70:30 husband:wife — provided documentation establishes the proportion. Each co-owner's share is computed as if the co-owner solely owned the proportionate part of the property — annual value, deductions, and self-occupation election all apply pro rata.

JUDICIAL EVOLUTION — Definite Shares

CIT v. T.V. Sundaram Iyengar & Sons (P.) Ltd., multiple HC decisions — confirmed that definite shares must be evidenced by registered conveyance or title document; oral / informal arrangements are insufficient. Where shares cannot be ascertained, income falls into AOP head and is taxed at maximum marginal rate.

PLANNING NOTES

(i) For couple buying property jointly, register both names with explicit share percentages — 50:50 or whatever the actual fund-contribution ratio. This locks in s. 24 treatment. (ii) Each co-owner can independently claim the s. 21(2)/(3) self-occupied election for ANY TWO of his/her co-owned properties — family planning across multiple properties. (iii) For interest deduction u/s 22(b), each co-owner gets independent ₹2L cap (self-occupied); aggregate family interest deduction can exceed ₹2L proportionately. (iv) For inherited property, ensure the partition deed / family-settlement document is registered to establish 'definite shares' — without this, AOP risk.

CROSS-REFERENCES

• Section 20 — HP charge.
• Section 21 — Annual value (each co-owner gets independent self-occupation election).
• Section 22 — Deductions (each co-owner gets independent ₹2L interest cap).
• Section 25 — Deemed-owner cases (next section).
• Section 96 — Clubbing of income (separate from s. 24 — clubbing is for transfer-deemed-owner cases under s. 25(c)/(d)).