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Microlesson · 5-min read

Types of House Properties (SOP, LOP, DLOP)

# Types of House Properties

Under Income from House Property, a property owned by the assessee can fall into three categories:

## 1. Self-Occupied Property (SOP)

  • Property kept for self-use / own use, OR
  • Property which is unoccupied for any reason
  • An assessee can claim up to two house properties as SOP

## 2. Let-Out Property (LOP)

  • Property which the assessee has given on rent to another person
  • No numerical limit — any number of properties can be LOP

## 3. Deemed Let-Out Property (DLOP)

  • Applies only when the assessee owns more than two properties kept for self-use / unoccupied
  • Assessee may choose any two of such properties as SOP
  • All remaining self-use / unoccupied properties are treated as DLOP and taxed as if let out

## Quick Decision Table

SituationTreatment
Given on rentLOP
Used for own residence (≤ 2 properties)SOP
Own use but more than 2 properties2 as SOP (choice), rest DLOP
Vacant / unoccupied but available for own useSOP

Worked example

### Example 1

Example: Mr. A owns 4 houses, all kept for his own use (none let out). How are they treated?

  • He can choose any 2 as SOP (preferably the ones with higher notional rent, to minimise DLOP tax).
  • The remaining 2 will be treated as DLOP — their notional rent will be taxed.

⚠️ Common exam mistakes

  • Treating only one property as SOP — the limit is two (after the Finance Act, 2019 amendment).
  • Forgetting that a vacant/unoccupied house can still be SOP if kept for own use.
  • Treating a let-out property as DLOP — DLOP applies only to properties kept for own use beyond the limit of two.
Bare-Act text Section 23(2) and 23(4) · Income-tax Act, 1961 · click to expand
Section 23(2): Where the property consists of a house or part of a house which (a) is in the occupation of the owner for the purposes of his own residence; or (b) cannot actually be occupied by the owner by reason of his employment, business or profession at any other place... the annual value of such house or part of the house shall be taken to be nil. Section 23(4): Where the property referred to in sub-section (2) consists of more than two houses, the provisions of sub-section (2) shall apply only in respect of two of such houses, which the assessee may, at his option, specify in this behalf.
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