Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

House property

jayant Mahajan (20 Points)

12 May 2020

Reply
Follow
Share

4 Replies

Kiran Hathalia (833 Points)
Replied 12 May 2020

As per section 23(3) of the income tax Act, 1961,
(a) If a single unit of a property is self-occupied for part of the year and let-out for the
remaining part of the year, then the Expecred Rent(ER) for the whole year shall be taken into account for determining the GAV. Expected rent shall be higher of Municipal value and fair rent,restricted to standard rent.
(b) The ER for the whole year shall be compared with the actual rent for the let out
period and whichever is higher shall be adopted as the GAV.
(c) However, municipal tax for the whole year is allowed as deduction provided it is paid
by the owner during the previous year.

Applying the above provisions in your Case I, The Expected Rent would be 180,000 and Actual rent is 140,000, therefore, GAV shall be 180,000,from that we will deduct municipal taxes of 6000,we will get 174,000. The same shall be considered as NAV and from that we will deduct standard deduction u/s 24 @ 30% and interst of borrowing of 30,000 ( since the loan is taken on or before 1999), there income from house property shall come to 91,800.

In Case II, The GAV shall be 190,000, NAV - 184,000, In one from House property -98,800.

jayant Mahajan (20 Points)
Replied 12 May 2020

Thanks sir

Liza Khan (2 Points)
Replied 14 February 2022

x own a property at Delhi (Municipal value Rs 164000 ,fair rent Rs 216000,standard rent Rs 180000) the house is let out up to January 31,2019 ( monthly rent being Rs 14000) from February 1,2019 the property is self- occupied for own residential purposes expenses incurred by x are Municipal tax Rs 6000 ( actually paid),repairs Rs 2100,insurance Rs 1100,interest on capital borrowed (date of borrowing being June 10,1991) for acquiring the property Rs 123000.assuming that the income of x from other sources is Rs 186000 .find out the net income of x for the assessment year 2019-20. does it make any difference if property is let out up to January 31,2019 @ Rs 19000 per month? theres is no unrealised rent. 0 Like Reply Follow Share More 2 Replies Kiran Hathalia (754 Points) Replied 12 May 2020 As per section 23(3) of the income tax Act, 1961, (a) If a single unit of a property is self-occupied for part of the year and let-out for the remaining part of the year, then the Expecred Rent(ER) for the whole year shall be taken into account for determining the GAV. Expected rent shall