Income from House Property
 HOW TO CALCULATE G.A.V. Q.1. Mr. Rajesh has one house property which is let out @ Rs. 80,000 p.m. Fair rent Rs. 90,000 p.m. Municipal Valuation Rs. 70,000 p.m. Standard Rent Rs. 81,000 p.m. Municipal tax paid Rs. 60,000 and interest paid on loan for construction of house property is Rs. 50,000. Compute his Income Tax Liability for A.Y 2014-15 and also show the treatment of Service Tax. Ans. 5,88,400. Q.2. Mrs. Kumar has let out one House property @ Rs. 62,000 p.m. Municipal Valuation Rs. 72,000 p.m. Fair Rent Rs. 90,000 p.m. Standard Rent Rs. 1,00,000 p.m. Municipal Tax paid Rs. 40,000 and Interest on loan taken for construction Rs. 60,000 Compute Income Tax Liability for the A.Y 2014-15 and also show the treatment of Service Tax Q.3. Compute gross annual value in the following cases for the assessment year 2014-15: Ans. G.A.V. 1,20,000. 1,26,500. 2,00,000. 1,65,000. Q.4. Compute gross annual value in the following cases for the assessment year 2014 – 15: Ans. G.A.V. 1,44,000. 1,25,000. 1,68,000. 2,04,000. Q.5. Mr. Rohan has let out one house property to Mr. Mohan @ Rs. 80,000 p.m. Fair rent Rs. 90,000 p.m. Municipal valuation Rs. 80,000 p.m. and Standard rent of the house Rs. 76,000 p.m. The house remained vacant for 2 months and there was unrealised rent for 3 months. Mr. Rohan has paid municipal tax of Rs. 60,000 and interest on loan for construction of house property is Rs. 69,000. Compute his Income Tax Liability for A.Y.2014-15 and also Service Tax Payable for the F.Y. 2013-14. HOW TO CALCULATE INTEREST ON BORROWED CAPITAL Q.6. Mr. X who took a Loan for Rs.2,50,000 @ 12% interest per annum on 1st June 2007 for construction of house. The construction of house completed on 31st July 2010 and the whole amount of loan repaid on 1st August 2012. Find out the amount of interest allowed as deduction for the Assessment year 2014-15? Ans. Pre-construction Interest is Rs.17,000 and Post is Rs.10,000. Q.7. Mr. X who took a loan for Rs.3,00,000 @ 15% interest per annum on 1st April 2005 for purchase of house. The construction of house completed on 31st December 2007 but 60% of the Loan is repaid by Mr. X on 31st October 2012. Find out the amount of loan allowed as deduction under section 24 for the assessment year 2014-15? Ans. Pre. Rs.27,000 and Post is Rs.33,750. Q.8. Mr. A Borrowed Rs.5,00,000 @ 12% p.a. on 1-4-2008 for construction of house property which was completed on 15-3-2012. The amount is still unpaid. The deduction of interest of previous year 2013-14 shall be ............... ? Ans. Pre Rs.36,000 and Put Post 60,000. Q.9. What shall be the amount of deduction if the house if completed on 2-4-2012: Ans. Pre- Rs.48,000. Q.10. Mr. A borrowed a sum of Rs.5,00,000 @ 12% p.a. on 1-4-2002 for construction of a house which was completed on 15-3-2008. What shall be the amount of deduction allowed on account of interest for the assessment year 2014-15? Ans. Pre - Nil and Post - Rs.60,000. Q.11. Compute interest allowed under section 24(b) in the following cases for assessment year 2014 – 15. Ans. Interest. 5,400. 36,000. 32,400. 31,200. 36,600. Q.12. Mr Shubham Jain took a loan of Rs. 5,00,000 on 01.10.2010 @ 10% p.a. for construction of house which was completed on 31.03.2014.Compute interest on capital borrowed for the previous year 2013-14. Ans. Pre Constriction Int. Rs. 25,000. Post Constriction Int. Rs. 75,000. Q.13. Mr. Ali has taken a loan of Rs. 15,00,000 on 01.07.2009 @ 12% p.a. for construction of one house which was completed on 01.05.2013 and was let out @ Rs. 60,000 p.m. wef 01.07.2013 and Fair rent is Rs. 70,000 p.m. and the assessee has paid municipal tax of Rs. 30,000 in P.Y. 2013-14 and the assessee has repaid the loan amount in annual instalment of Rs. 1,00,000 starting from 01.01.2012. Ans. Post. 1,53,000. Pre. 1,31,400. Q.14. Mr. Yash Kumar has constructed one house on 01.09.2013 and it was let out @ Rs. 50,000 p.m. and municipal taxes paid are Rs. 35,000. The house was constructed after talking a loan from outside India and interest allowed under section 24(b) is Rs. 2,10,000, but the assessee has not deducted tax at source. Computed assessee’s tax liability for assessment year 2014-15. HOW TO CALCULATE INCOME FROM HOUSE PROPERTY Q.15. Municipal value of a house is Rs. 90,000. Fair rent. Rs. 1,40,000, Standard rent Rs. 1,20,000. The house property-has been let for Rs. 12.000 p.m. and was vacant for one month during the previous year 2012-13. Municipal taxes paid during the year were Rs. 40.000. Compute the annual value for assessment year 2013-14. Ans. Net annual value = 92,000. Q.16. Take the above Illustration No. 5.3. Assume the property was vacant for 3 months. Determine the annual value for the assessment year 2013-14. Ans. Net annual value = 68,000. Q.17. Municipal value of a house is Rs. 1,20,000. Fair rent Rs. 1,80.000 Standard rent Rs. 1,50,000. The house property was let for Rs. 14,000 p.m. However, the tenant vocated the property on 30.10.2012. For the months of November, 2012 to January 2013, the property remained vacant. It was let out for Rs. 18,000 p.m. w.e.f. 1.2.2013. Municipal taxes paid were 15% of Municipal Value. Compute the annual value of the house property. Ans. Rs. 1,16,000. Q.18. R has a house property in Delhi whose Municipal Value is Rs. 1,00,000 and the Fair Rental Value is Rs.1.20,000. It was sell-occupied by R. from 1.4.2012 to 31.7.2012. w.e.f. 1.8.2012 it was let out at Rs. 9,000 p.m. Compute the annual value of the house property for the assessment year 2013-14 if the municipal taxes paid during the year were Rs. 20.000. Ans. Net annual value = 1,00,000. Q.19. Assessee has one house property at Vasant kunj in Delhi. He says with his family in this house. I he rent of similar property in the neighbourhood is Rs. 56,000 per annum. The municipal valuation is Rs. 28,000. Municipal taxes paid in respect of the property are Rs. 5,000 (including Rs. 1,000 for an earlier year). The house was constructed in 1998 with aloan of Rs. 12.00,000 taken from HDFC. During the previous year 2012-13, the assessee refunded Rs. 2,30,000 which includes Rs. 1,68,000 as current year interest. Compute the income from house property for assessment year 2013-14. (b) What would be the deduction on account of interest if the loan was taken on or after 1.4.2003 and the property was completed in December, 2004. Ans. Loss from house property = (-) 30,000 (B) Rs. 1,50,000. Q.20. Mr. X owns a house in Delhi. During the previous year 2012-13, 3/4th portion of the house was self-occupied for full year and l/4 the portion was let out for residential purposes from 1.4.2012 to 31.12.2012 on a rent of Rs.700 p.m. From 1.1.2013 this portion was also used for own residence. Municipal valuation of the house is Rs. 20.000.He incurred the following expenditure in respect of the house properly: Municipal taxes due 6,000; Repairs Rs. 2.000: Fire Insurance Premium Rs. 3,500; Land Revenue Rs. 4,000; Ground Rent Rs. 200 were paid during the year. A loan of Rs. 1.00,000 was taken on 1.4.2007 @ 9% p.a. for the construction of the house which was completed on 28.3.2009, Nothing was repaid on loan account so far. Find out his income form house property for the assessment year 2014 – 15. Ans. Income from self-occupied = (-) 6,750. FILL IN THE BLANK QUESTIONS WITH ANSWER Q.1. The Rent derived from vacant Land is to be taxable U/H 1/H/P. (True / False) Q.2. Person having right in a property for a period not less than ..........years is deemed owner. Q.3. If composite Rent is non-separable, then the entire Rent would be taxable U/H …………..  as the case may be. Q.4. Municipal taxes are allowed as deduction only when they are paid by ………… Q.5. Statutory deduction U/S 24 is 30% of NAV. (True/False) Q.6. Pre-construction period interest is allowed in ......... equal instalments. Q.7. Interest on unpaid Interest is allowed as deduction (True / False) Q.8. Interest on Fresh Loan taken to repay the original loan is allowed as deduction. (True / False) Q.9. When Date of Loan and Date of Completion of construction is same, than PCP will be ………… Q.10. In case of deemed to be let out, option can be changed from year to year. (True / False) Q.11. Unrealised Rent shall not be included in computing the Actual Rent. (True / False) Q.12. Can NAV be negative? Q.13. Under self occupied Property, Income from that Property can never arise. (True/ False) Q.14. If Actual Rent < Expected Rent due to Vacancy only, then……....shall be taken as Annual value. Q.15. Interest on Borrowed capital is always allowed on.........basis. Q.16. If unrealised Rent was claimed as deduction in earlier years and later on recovered, what will be the taxable impact of the URR in the year in which it is recovered? Q.17. In case Self-occupied acquired by co-owner, the NAV would be………… Q.18. What is the amount of deduction in case of Arrears of Rent? Q.19. Expected Rent is the higher of Municipal Valuation and (a) Actual Rent(b) Standard Rent(c) Fair Rent(d) None of the above Q.20. Municipal taxes should be actually paid during the previous year in order to claim deduction. (True / False) Q.21. Rental Income from Residential Property owned by a company carrying on Property Rental Business is taxable U/HI/F/HP. (True / False) Q.22. Ownership is the criteria of Assessment U/H I/H/P. Comment. Q.23. In case of Self Occupied property, NAV is always...... Q.24. Define Annual Value. Q.25. Partnership firm can get benefit of Self Occupation. (True / False) Q.26. House property is let out to employer and was allotted to the employee who had let it; benefit of self occupation is not available. (True/ False) Q.27. In respect of loan taken for Self Occupied Property before 1st April 99, the maximum amount deductible is ..... Q.28. Deduction of Interest is allowed even if the Interest is not actually paid during the year, (true / False) Q.29. Deduction of Interest is allowed even if the Interest is not actually paid during the year, (true / False) Q.30. Income from HP can arise even when the HP does not exist. (True / False) Q.31. Income from HP of a local authority is taxable U/H I/H/P. (True / False) Q.33. Godowns constructed and used for storing own stocks. It was later let out. The Rental Income is chargeable to tax U/H (a) HP(b) O/S(c) PGBP(d) No these Q.34. Loss U/H H/P can be carried forward to……...Assessment years. Q.35. Deduction is allowed in case of unrealised Rent. (True / False) Q.36. If rent from Building and Furniture was Inseparable. It is income from Q.37. Partnership Business is carried on in the premises of one of the partners. The partners, as an Individual is entitled to treat the property is used for own Business. (True/ False)