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Ganesh has a property whose municipal valuation...

Ganesh has a property whose municipal valuation is ` 2,50,000 p.a. The fair rent is ` 2,00,000 p.a. and the standard rent fixed by the Rent Control Act is ` 2,10,000 p.a. The property was let out for a rent of ` 20,000 p.m. However, the tenant vacated the property on 31.1.2018. Unrealised rent was ` 20,000 and all conditions prescribed by Rule 4 are satisfied. He paid municipal taxes @8% of municipal valuation. Interest on borrowed capital was` 65,000 for the year. Compute the income from house property of Ganesh for A.Y.2018-19.

Ganesh has a property whose municipal valuation is ` 2,50,000 p.a. The fair rent is ` 2,00,000 p.a. and the standard rent fixed by the Rent Control Act is ` 2,10,000 p.a. The property was let out for a rent of ` 20,000 p.m. However, the tenant vacated the property on 31.1.2018. Unrealised rent was ` 20,000 and all conditions prescribed by Rule 4 are satisfied. He paid municipal taxes @8% of municipal valuation. Interest on borrowed capital was` 65,000 for the year. Compute the income from house property of Ganesh for A.Y.2018-19.

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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 250000, FR 200000, SR is 210000

Therefore ER will be 210000

Step 2: Calculation of GAV:

GAV is higher of ER or AR

ER is 210000

If an owner of house property could not realise rent from the tenant, it will not be considered as income. So unrealised rent of 20000 shall be deducted from the actual

So Actual rent 20000*10-20000= 180000

Further if actual rent is less than expected rent beacuse of vacancy then GAV will be actual rent.

Therefore GAV is 180000.

Step 3: NAV=GAV-Municipal Taxes Paid

180000-20000= 160000

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

NAV= 160000

Less: Deduction @30%= 48000

Less; Interest= 65000

Less; preconstruction interest=0

Therefore income from house property is 160000-48000-65000= 47000


Ganesh has a property whose municipal valuation is ` 2,50,000 p.a. The fair rent is ` 2,00,000 p.a. and the standard rent fixed by the Rent Control Act is ` 2,10,000 p.a. The property was let out for a rent of ` 20,000 p.m. However, the tenant vacated the property on 31.1.2018. Unrealised rent was ` 20,000 and all conditions prescribed by Rule 4 are satisfied. He paid municipal taxes @8% of municipal valuation. Interest on borrowed capital was` 65,000 for the year. Compute the income from house property of Ganesh for A.Y.2018-19.

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