Raghuveer let out a property on rent for ₹16,000 per month from 16th February, 2023. Fair rental value of such property is ₹60,000 per quarter, whereas Standard rent is ₹3,20,000 per annum. During the financial year 2023

CS Executive · Tax Laws and Practice · PYQS · December 2024
Raghuveer let out a property on rent for ₹16,000 per month from 16th February, 2023. Fair rental value of such property is ₹60,000 per quarter, whereas Standard rent is ₹3,20,000 per annum. During the financial year 2023-24, Raghuveer paid following expenses for such house property: Municipal taxes for F.Y. 2023-24 - ₹30,000 (which is 10% of municipal value); Lease rent - ₹32,800; Repair charges - ₹23,700; Fire insurance - ₹31,150; and Interest on capital borrowed for construction - ₹72,300. The construction of the property was completed on 15th February, 2023. The tenant had vacated this house on 29th February, 2024. Such house was vacant for the month of March, 2024. You are required to calculate the taxable income from the house property of Raghuveer for the assessment year 2024-25, assuming that he does not opt to pay tax under section 115BAC.

Answer & Explanation:

Computation of Taxable House Property Income of Raghuveer (NOR) for the AY 2024-25 Particulars Amount (₹) Municipal Value (₹30,000/10 x 100) 3,00,000 Fair Rent (₹60,000 x 4) 2,40,000 Higher of the two (A) 3,00,000 Standard Rent (B) 3,20,000 Reasonably expected rent - lower of (A) and (B) 3,00,000 Annual Rent Received or Receivable (₹16,000 x 12) 1,92,000 Higher of the Expected rent and Annual Rent 3,00,000 Less: Vacant Period Rent (1 Month) (16,000) Gross Annual Value 2,84,000 Less: Municipal tax paid during the year (30,000) Net Annual Value 2,54,000 Less: Deduction u/s 24@ 30% of NAV (₹2,54,000 x 30%) (76,200) Less: Interest on moneys borrowed for construction (72,300) Income from House Property 1,05,500

Topics: Income Tax

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