Even the houses owned in India are taxable under Indian income tax rules.
According to chapter 4, section 22-27 of the Indian Income Tax Act, 1961 there is a provision for income under the head of house property. The calculation of this tax on houses is done by local municipalities based on certain rules defined of the Act.
The basis of computation for tax on houses is the annual value of the house. if you own the house, you are the ‘assessee’, as per the exact language used in the text of the Act. So the basic charge is on the potential of your property to generate income and not on the rent you receive.
In case you use the house for any business and make profits, then that profit is taxed differently and not as house tax.
In case you own the house and reside in it throughout the financial year, the annual value is taken as zero. But at the same time you will not receive any deductions on tax except for that which is based on the interest on borrowed capital.
If you let out the house or a part of it for any period of time during the financial year for which the tax is being calculated, then proportionate annual value will be calculated and deducted from the gross annual value for the whole year.