Solve plz

Tax queries 1112 views 3 replies

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Please try to solve my problem as i am facing problem in question

Mr A is the owner of a house in Mumbai completely let out for resdential purposes, consisting of two flats of different sizes.They are let out at Rs5000 pm and and Rs7000 pm respectively Municipal value of house is Rs 96,000

The rate of municipal tax is @ 15%p.a. the other particulars of house is as under:

(a) The house is newly constructed, the construction is completed on 1 april 2007

(b)Interest on loan of Rs1,00,000 taken on 1.04.2004 @ 10% pa to construct a house is Rs10,000 for the year. Interest of preceeding years three year is also paid but not claimed as deduction.

(c)The second flat is vacant for 3 month during the year

(d)Collection charges claimed by him were Rs700 but actual expenses were Rs500 for the year.

compute his income from house property for Assesment year 2012-13

Replies (3)

CA Harsh Lunia

Audit

81 Points Joined August 2012

First of all, there is no need to divide the house for the purpose of calculation of income from house property as both the flats belong to the same owner and moreover as per one of the decisions of Karnataka High Court, more than 1 flat in the same building can be treated as one only.

Now, we can clearly see that the annual rent is more than the ALV (municipal value in this case), hence annual rent will be our GAV. Hence GAV is Rs 60000 (flat one) + Rs 63000 (flat 2) = Rs 123000.

Municipal Taxes to be deducted from GAV = Rs 14400 (Rs 96000*.15)

Therefore, NAV = Rs 108600

Deductions from NAV :-

30% = Rs 32580

Interest (sec 24b) = Rs 10000 for the current year (assuming that loan is still pending) and Rs 6000 as 1/5th of accumulated interest from 2004 to 2007. Hence total interest allowed = Rs 16000

Total income from house property = Rs 60020

(Do correct me if I am wrong)