Illustrations · Q6
Q.Mr. Nag's house has a Municipal Value of ₹1,00,000, Fair Rent of ₹1,10,000, and Standard Rent of ₹1,05,000. It was let out throughout the previous year 2025-26 at an actual rent of ₹1,20,000. He paid Municipal Taxes of ₹8,000 and interest of ₹1,50,000 (on a large loan taken for the house) during the year. Compute his Income from House Property for AY 2026-27, and state whether the result is possible under the Act.
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Start your 14-day free trial to unlock the full solution →Step 1 — Expected Rent: higher of Municipal Value (₹1,00,000) and Fair Rent (₹1,10,000) = ₹1,10,000, restricted to Standard Rent ₹1,05,000 → Expected Rent = ₹1,05,000.
Step 2 — Gross Annual Value: let out throughout the year with no vacancy, and Actual Rent Received (₹1,20,000) exceeds Expected Rent (₹1,05,000), so GAV = ₹1,20,000.
| Particulars | Amount (₹) |
|---|---|
| Gross Annual Value | 1,20,000 |
| Less: Municipal Taxes paid by owner | 8,000 |
| Net Annual Value | 1,12,000 |
| Less: Standard Deduction @ 30% of NAV [24(a)] | 33,600 |
| Balance | 78,400 |
| Less: Interest on borrowed capital [24(b)] | 1,50,000 |
| Income from House Property | (71,600) |
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