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Smt. Rajalakshmi owns a house property at Adyar...

Smt. Rajalakshmi owns a house property at Adyar in Chennai. The municipal value of the property is ` 5,00,000, fair rent is ` 4,20,000 and standard rent is ` 4,80,000. The property was let-out for ` 50,000 p.m. up to December 2017. Thereafter, the tenant vacated the property and Smt. Rajalakshmi used the house for self-occupation. Rent for the months of November and December 2017 could not be realised in spite of the owner’s efforts. All the conditions prescribed under Rule 4 are satisfied. She paid municipal taxes @12% during the year. She had paid interest of ` 25,000 during the year for amount borrowed for repairs for the house property. Compute her income from house property for the A.Y. 2018-19.

Smt. Rajalakshmi owns a house property at Adyar in Chennai. The municipal value of the property is ` 5,00,000, fair rent is ` 4,20,000 and standard rent is ` 4,80,000. The property was let-out for ` 50,000 p.m. up to December 2017. Thereafter, the tenant vacated the property and Smt. Rajalakshmi used the house for self-occupation. Rent for the months of November and December 2017 could not be realised in spite of the owner’s efforts. All the conditions prescribed under Rule 4 are satisfied. She paid municipal taxes @12% during the year. She had paid interest of ` 25,000 during the year for amount borrowed for repairs for the house property. Compute her income from house property for the 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 500000 FR420000, SR is 480000

Therefore ER will be 480000

Step 2: Calculation of GAV:

GAV is higher of ER or AR
ER is 480000
If an owner of house property could not realise rent from the tenant, it shall not be considered as income. When the owner realises such rent in future, this will be taxable in that year when he realises from the tenant.
So Actual rent 50000*9=450000
Therefore GAV is 480000

Step 3: NAV=GAV-Municipal Taxes Paid
=480000-60000=420000

Step 4: NAV less Deductions under Section 24....
NAV= 420000
Less: Deduction @30%= 126000
Less; Interest= 25000
Less; preconstruction interest=0

Therefore income from house property is 420000-126000-25000= 269000

Smt. Rajalakshmi owns a house property at Adyar in Chennai. The municipal value of the property is ` 5,00,000, fair rent is ` 4,20,000 and standard rent is ` 4,80,000. The property was let-out for ` 50,000 p.m. up to December 2017. Thereafter, the tenant vacated the property and Smt. Rajalakshmi used the house for self-occupation. Rent for the months of November and December 2017 could not be realised in spite of the owner’s efforts. All the conditions prescribed under Rule 4 are satisfied. She paid municipal taxes @12% during the year. She had paid interest of ` 25,000 during the year for amount borrowed for repairs for the house property. Compute her income from house property for the A.Y. 2018-19.

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