Annual value is determined on the following basis
a) Compare fair rent with municipal value, higher of the two is considered as A.
b) Compare A with Standard rent, lowerof the two is considered as B. (gross annual value for deemed let out property, your quest. 1)
c) Compare B with Actual rent (AR) received-
1. If AR is greater than B then AR is annual value.
2. If B is greater then AR then-
i. If due to vacancy, AR is the annual value.
ii. If due to any other factors, B is the Annual value.
1. In your quest. value calculated in b) will be considered as Annual value as actual rent received is NIL.
2. If you plan to let out property to your brother and if the value is lesser then income from house property will be calculated from the above method and if I’m not mistaken then value B will be considered as Annual value for the income tax purpose.
3. A) If the property is let out to your brother then on let out property there are no restrictions on the maximum amount that can be claimed as interest.
B) If the property is vacant then you can claim upto Rs. 1.5 Lac as interes.
4. You can claim interest u/s 24 (b) on due basis. Therefore you can claim (Interest on loan from SBI + Interest on loan from parents) upto Rs. 1.5 lac if property is vacant. (If on the same house) and if not vacant then as per 3. A)
5 & 6. Interest loan to your parents is taxable on due basis.
Hope your query is solved,
Please correct me members if I'm wrong.