Sanjay has a house consisting of two identical units. One unit is self-occupied and the other is let out for a monthly rent of ₹ 30,000 throughout the financial year 2023-24. Municipal tax paid during the year for the to

Computation of Income from House Property of Mr. Sanjay Particulars Self-occupied (₹) Let out (₹) Gross annual value Nil 3,60,000 Less: Municipal tax paid Nil (35,000) Net Annual Value Nil 3,25,000 Less: Deduction u/s 24 (i) Statutory deduction @ 30% of NAV Nil (97,500) (ii) Interest on Loan: Capital Interest: Pre-construction period interest (from 01.07.2020 till 31.03.2022) (₹ 30,00,000 * 8% * 21/12) = ₹ 4,20,000. Allowable in 5 equal instalments (₹ 4,20,000/5) (84,000) (84,000) (b) Revenue Interest: Current period Interest (Allowed on due basis) (₹ 30,00,000 * 8%) (1,20,000) (1,20,000) Income from house property (2,04,000) 23,500 Net Loss from house property (1,80,500) Note: The solution provided in the source document has a calculation error for pre-construction interest and current period interest. The pre-construction period is from 01.07.2020 to 31.03.2022 (21 months). Total interest for this period is ₹30,00,000 * 8% * 21/12 = ₹4,20,000. One-fifth is ₹84,000. Current year interest is ₹30,00,000 * 8% = ₹2,40,000. The maximum deduction for self-occupied property is ₹2,00,000. For let-out property, full interest is deductible. The municipal tax paid by cash is not deductible. Only ₹40,000 paid online is deductible. For two units, ₹20,000 each. Corrected calculation for Municipal Tax: Total Municipal Tax paid is ₹70,000. Out of this, ₹30,000 was paid in cash and ₹40,000 through online banking. As per Section 43B, cash payment of municipal tax is not allowed as a deduction. Therefore, only ₹40,000 is deductible. Since there are two identical units, ₹20,000 is attributable to the let-out property. Corrected calculation for Interest on Loan: Pre-construction period: 01.07.2020 to 31.03.2022 = 21 months. Total pre-construction interest = ₹30,00,000 * 8% * (21/12) = ₹4,20,000. Allowable in 5 equal installments = ₹4,20,000 / 5 = ₹84,000 per year. Current year interest = ₹30,00,000 * 8% = ₹2,40,000. Total interest for each unit = ₹84,000 (pre-construction) + ₹2,40,000 (current) = ₹3,24,000. For Self-Occupied Property: Gross Annual Value: Nil Less: Municipal Tax: Nil Net Annual Value: Nil Less: Deduction u/s 24(b) Interest on borrowed capital: Restricted to ₹2,00,000 (since loan taken for construction and completed within 5 years). Income from Self-Occupied Property: (₹2,00,000) For Let-Out Property: Gross Annual Value (Actual Rent): ₹30,000 * 12 = ₹3,60,000 Less: Municipal Tax paid (50% of ₹40,000 paid online) = ₹20,000 Net Annual Value: ₹3,60,000 - ₹20,000 = ₹3,40,000 Less: Standard Deduction @ 30% of NAV = 30% of ₹3,40,000 = ₹1,02,000 Less: Interest on borrowed capital (full interest allowed) = ₹3,24,000 Income from Let-Out Property: ₹3,40,000 - ₹1,02,000 - ₹3,24,000 = (₹86,000) Total Income from House Property: (₹2,00,000) + (₹86,000) = (₹2,86,000)