Mohan owns a house located in Varanasi. The construction of the house was completed in July, 2011. One-fourth floor area of the house is utilised by him for his own residence. He is running his own clinic in another one-

Computation of Income from House Property of Mohan for the AY 2016-17 Particulars Amount (in ₹) Annual Value of ¼ portion used for his own profession Nil Annual Value of ¼ portion used for his own residence Nil Less: Municipal Taxes Nil Net Annual Value Nil Less: Interest on Borrowing (1/4 * ₹60000) (15,000) Loss from house property (Self Occupied) (15,000) Gross Annual Value of let-out portion (₹8,000 * 10) 80,000 (a) Expected Rent = Fair Rent or Municipal Value whichever is higher subject to Standard Rent i.e. ₹1,40,000 / 2 = 70,000 (b) Gross Annual Value = Expected Rent or Actual Rent whichever is higher i.e. ₹70,000 or (₹8,000*10) = ₹80,000 Less: Municipal Tax (₹20,000 * ½) (10,000) Net Annual Value 70,000 Less: Standard Deduction (Section 24b) (₹70,000 *30%) (21,000) Less: Interest on Borrowing (₹60,000* ½) (30,000) Income from let out house property 19,000 Income under the head house property 4,000 Note: Expenses on Repair and Maintenance and Insurance would not be allowed as deduction in computing the income under the head house property.