On what basis is income from House Property taxed?

 The annual value of house properties owned by a person other than those which are occupied by him for the purpose of any business or profession carried on by him is charged to Income-tax as 'Income from House Property'. Annual value of a property is defined as 'the sum for which the property might reasonably be expected to let from year to year'. If the property is in the occupation of the tenant, the taxes levied by any local authority in respect of the property shall, to the extent such taxes are borne by the owner should be deducted in determining the annual value of the property of that previous year in which such taxes are actually paid by the owner. 

Prakash sir is right.