News Topics

Anirudh has a property whose municipal valuatio...

Anirudh has a property whose municipal valuation is ` 1,30,000 p.a. The fair rent is ` 1,10,000 p.a. and the standard rent fixed by the Rent Control Act is ` 1,20,000 p.a. The property was let out for a rent of ` 11,000 p.m. throughout the previous year. Unrealised rent was ` 11,000 and all conditions prescribed by Rule 4 are satisfied. He paid municipal taxes @10% of municipal valuation. Interest on borrowed capital was ` 40,000 for the year. Compute the income from house property of Anirudh for A.Y. 2018-19.

Anirudh has a property whose municipal valuation is ` 1,30,000 p.a. The fair rent is ` 1,10,000 p.a. and the standard rent fixed by the Rent Control Act is ` 1,20,000 p.a. The property was let out for a rent of ` 11,000 p.m. throughout the previous year. Unrealised rent was ` 11,000 and all conditions prescribed by Rule 4 are satisfied. He paid municipal taxes @10% of municipal valuation. Interest on borrowed capital was ` 40,000 for the year. Compute the income from house property of Anirudh for A.Y. 2018-19.

0
Jeeba Lal Aug. 04, 2018

Calculation of income from house property

Step 1: Calculation of Expected Rent

Expected Rent is higher of MV and FR but restricted to SR

MV is 130000, FR 110000, SR is 120000

Therefore ER will be 12000

Step 2: Calculation of GAV:

GAV is higher of ER or AR

ER is 120000

If an owner of house property could not realise rent from the tenant, it will not be considered as income. So unrealised rent of 11000 shall be deducted from the actual

So Actual rent 11000*12-11000= 121000

Unrealized rent of 11000 will be taxed when you received from a tenant and a standard deduction of 30% will be allowed in the year of receipt.

Therefore GAV is 121000

Step 3: NAV=GAV-Municipal Taxes Paid

121000-13000=108000

Step 4: NAV less Deductions under Section 24....

NAV= 108000

Less: Deduction @30%= 32400

Less; Interest= 40000

Less; pre-construction interest=0

Therefore income from house property is 121000-32400-40000=35600


Anirudh has a property whose municipal valuation is ` 1,30,000 p.a. The fair rent is ` 1,10,000 p.a. and the standard rent fixed by the Rent Control Act is ` 1,20,000 p.a. The property was let out for a rent of ` 11,000 p.m. throughout the previous year. Unrealised rent was ` 11,000 and all conditions prescribed by Rule 4 are satisfied. He paid municipal taxes @10% of municipal valuation. Interest on borrowed capital was ` 40,000 for the year. Compute the income from house property of Anirudh for A.Y. 2018-19.

Ask Question Create News