Mr. Gupta has given his premises on hire to a company for its office. He submits the following particulars:
1. Municipal rent value: 150,000
2. Fair rental value: 166,000
3. Standard rent: 160,000
4. Actual rent: 156,000
5. Municipal taxes: 12,000 per annum
6. Rent on loan purchase of house: 22,000
Compute his income from house property for the previous year 2021-22.
Answer (2)
To compute the income from house property for Mr. Gupta for the previous year 2021-22, we need to follow these steps:
Determine the Gross Annual Value (GAV):
The GAV is the higher of the actual rent received and expected rent. Expected rent is the lower of the municipal rental value and fair rental value, or the standard rent.
First, let's determine the expected rent:
Municipal rental value = 150,000
Fair rental value = 166,000
Therefore, the expected rent = min ( 166 , 000 , 160 , 000 ) = 160 , 000
Actual rent = 156,000
Thus, GAV = max ( 156 , 000 , 160 , 000 ) = 160 , 000
Calculate the Net Annual Value (NAV):
NAV is obtained by subtracting municipal taxes from the GAV. Since the taxes are borne by the owner, they must be deducted.
Municipal taxes = 12,000
NAV = 160,000 - 12,000 = 148,000
Standard Deductions from House Property:
Under Section 24(a), a standard deduction of 30% of the NAV is allowed.
Under Section 24(b), interest on loan for purchase of house is deductible.
Compute Income from House Property:
Deduction under Section 24(a) = 0.30 * 148,000 = 44,400
Deduction under Section 24(b) = 22,000
Total deductions = 44,400 + 22,000 = 66,400
Income from house property = NAV - Total deductions = 148,000 - 66,400 = 81,600
Therefore, Mr. Gupta's income from house property for the previous year 2021-22 is ₹81,600.
Mr. Gupta's income from his house property for the previous year 2021-22 is calculated as ₹81,600. This amount is derived from the net annual value of his property after deducting municipal taxes and allowable deductions. The calculation involves determining the gross annual value, net annual value, and applying standard deductions according to tax regulations.
;
