Q.Mr. Chatterjee owns two houses. House A is let out throughout the previous year 2025-26 with a computed Income from House Property of ₹70,000 (per the rules of Section 6.ii). House B is self-occupied throughout the year; he took a loan for its construction (completed within 5 years of the loan) and paid interest of ₹1,20,000 on it during the year. Compute his total Income from House Property for AY 2026-27.

Where an assessee owns a let-out house and a self-occupied house, the two figures are computed independently and then simply added together.

House A (let out): already computed at Income from House Property = ₹70,000, following the full Section 23(1)/24 sequence of Section 6.ii.

House B (self-occupied): Annual Value = Nil under Section 23(2). The loan is for construction, completed within 5 years of the end of the FY the loan was taken, so the ₹2,00,000 ceiling applies. Actual interest paid, ₹1,20,000, is WITHIN this ceiling, so the FULL ₹1,20,000 is deductible (no restriction needed, since it does not exceed the cap).

Students sometimes forget to check whether the self-occupied house's actual interest is within or beyond its applicable ceiling before adding it in — here ₹1,20,000 is within the ₹2,00,000 ceiling, so the FULL amount is used, not a further-rest …