Chandra owns a house property constructed with the borrowed capital on 31.03.2008 and since then used by him for own residential purposes. Municipal value of the property is ₹1,00,000 whereas fair rent is ₹80,000 and sta

CS Executive · Tax Laws and Practice · PYQS · December 2020
Chandra owns a house property constructed with the borrowed capital on 31.03.2008 and since then used by him for own residential purposes. Municipal value of the property is ₹1,00,000 whereas fair rent is ₹80,000 and standard rent is ₹90,000. Expenses incurred by Chandra during the previous year 2019-20 for Municipal tax: ₹15,000, insurance: ₹2,000, interest on capital borrowed to construct the property ₹70,000. Income/loss chargeable under the head house property for the assessment year 2020-21 shall be
(A) (₹70,000)
(B) (₹85,000)
(C) (₹30,000)
(D) (₹2,00,000)

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A), (C). Official source note: Option A & C Both are correct. Option A is correct, assuming condition for claming higher deduction (such as contruction has been completed within 5 years from the end of the financial year in which capital was borrowed) is fulfiled. Otherwise, Option C is correct.

Topics: Income from House Property

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