1. Determine the Net Annual Value House property for the AY 2020-21.

(2017 QP)

Municipal value ₹ 1, 50,000

Fair rent ₹ 1, 70,000

Standard rent ₹ 1, 30,000

Actual rent p.m ₹ 15,000

Unrealised rent ₹ 18,000

House Vacancy period 1 month

Municipal Tax paid ₹ 15,000

Date of Borrowing Loan 1/06/2013

Date of Repayment of Loan 10/5/2021

Date of Completion of Construction May 2018

Amount of Loan ₹ 30,000

Interest on Loan 20% per annum

Solution:

Particulars Amount

MRV 1,50,000
OR WEH
FRV 1,70,000
NOTIONAL RENT 1,70,000
OR WEL
STANDARD RENT 1,30,000
EXPECTED RENT 1,30,000
OR WEH
ACTUAL RENT 1,62,000
(Annual Rent – Unrealised Rent – Common Facility Cost)
(1,80,000 – 18,000 = 1,62,000 )
GAV Before Vacancy Period Loss 1,62,000
Less : Vacancy Period Loss 15,000
GROSS ANNUAL VALUE 1,47,000
Less : Municipal Tax Paid by Owner 15,000
NET ANNUAL VALUE 1,32,000
Less : Deductions u/s 24
a) Standard Deduction – 30% of NAV 39,600
b) Interest on Borrowed Capital
i) Pre-Construction Interest 5,800
ii) Previous Year Interest 6,000 11,800

NET TAXABLE INCOME FROM HOUSE PROPERTY 80,600

CALCULATION OF INTEREST ON LOAN

Date of Borrowing Loan 1/06/2013

Date of Repayment of Loan 10/5/2021

Date of Completion of Construction May 2018

Amount of Loan ₹ 30,000

Interest on Loan 20% per annum

Pre-Construction Interest
2013-14 = 01/06/2013 to 31/03/2014 = 30,000 x 20/100 x 10/12 = 5,000

2014-15 = 01/04/2014 to 31/03/2015 = 30,000 x 20/100 x 1 = 6,000

2015-16 = 01/04/2015 to 31/03/2016 = 30,000 x 20/100 x 1 = 6,000

2016-17 = 01/04/2016 to 31/03/2017 = 30,000 x 20/100 x 1 = 6,000

2017-18 = 01/04/2017 to 31/03/2018 = 30,000 x 20/100 x 1 = 6,000

Total = Rs. 29,000

29,000 / 5 = Rs. 5,800

PY Interest
2020-21 = 01/04/2020 to 31/03/2021 = 30,000 x 20/100 x 1 = Rs. 6,000
 2. Sri kishore is the owner of 3 houses . the following are the particulars of his property
for the year ending 31/3/2021. (BU QP 2006 & 2011)

Particulars House 1 House 2 House 3

Year of construction 2010 2012 2014

Purpose of use Let out to Self occupied Let out to

bank residence

Actual rent received (PA) 30,000 - 24,000

Municipal value 32,000 28,000 30,000

Municipal tax paid by 1,200 1,000 3,000

kishore

Municipal tax paid by 2,000 1,800 -

tenant

Fire insurance premium 2% 20% 2%

Interest on loan taken for - 7,000 5,000

the renewal of the house

Compute taxable from the house property of Sri Kishore for the A.Y 21 – 22

Solution : Computation of Taxable Income from House Property

Assessee – Mr. Kishore PY : 2020-21
Status – Resident AY : 2021-22

Particulars Amount Amount Amount

House – 1 House – 2 House – 3

Purpose of Use
LOP SOP LOP
MRV 32,000 30,000
OR WEH
FRV NA NA
NOTIONAL RENT 32,000 30,000
OR WEL
STANDARD RENT NA NA
EXPECTED RENT 32,000 30,000
OR WEH
ACTUAL RENT 30,000 24,000
(Annual Rent – Unrealised Rent – Common Facility
Cost)
GAV Before Vacancy Period Loss 32,000 30,000
Less : Vacancy Period Loss NIL NIL
GROSS ANNUAL VALUE 32,000 NIL 30,000
Less : Municipal Tax Paid by Owner 1,200 3,000
NET ANNUAL VALUE 30,800 NIL 27,000
Less : Deductions u/s 24
a) Standard Deduction – 30% of NAV 9,240 8,100
b) Interest on Borrowed Capital NIL
i) Pre-Construction Interest
ii) Previous Year Interest 7,000 5,000

TAXABLE INCOME FROM HOUSE PROPERTY 21,560 (7,000) 13,900

NET TAXABLE INCOME FROM HOUSE PROPERTY

Rs. 28,460
(21,560 – 7,000 + 13,900)

1. Mrs. Shantha (resident) owns two houses in Bangalore. She has letout both the
houses throughtout the year for residential purpose.
HOUSE I HOUSE II
Municipal value 4,00,000 12,00,000
Fair Rental Value 7,20,000 7,20,000
Rent received 4,80,000 8,00,000
Standard Rent 6,00,000 6,00,000
Repairs 72,000 1,00,000
Municipal Tax paid 40,000 1,20,000
Insurance Premium paid 48,000 70,000
On 1st April 2020, she bought residential house for self occupation for Rs. 10,00,000 by
taking a housing loan in Canara Bank. Loan amount was Rs. 7,00,000 and rate of interest
12% p.a. Compute taxable income from House property from the Assessment Year 2021-22.
 3. Mr. Praveen is the owner of three houses. The particulars are as follows:
Particulars House A House B House C
Annual fair rent 40,000 35,000 50,000
Municipal valuation 50,000 40,000 50,000
Standard rent 45,000 42,000 55,000
Let out (per month) 3,000 2,500 ----
Purpose of use Let out Let out Self
Residential business occupied
Repairs 2,000 ---- 5,000
Collection charges 3,000 1,000 ----
Interest on loan 15,000 5,000 2,000
Municipal tax is 10% taken for repairs of MV. Municipal tax of House A was paid by
tenant, but Municipal tax of House B was not paid till 31.03.21, municipal tax of
House C was paid by owner. House A remained vacant for 4 months. Compute
income from House Property for A.Y. 2020-21.

4. Mr. Viswas (resident) owns a building consisting of 3 identical and

independent units the construction of which completed on 1.4.2020. The
building was occupied from 1.4.2020 onwards. The particulars pertaining to
the 3 units for the year ended 31.3.2021 are given below:
Particulars Unit I Unit II Unit III
Fair rent 30,000 30,000 30,000
Rent received --- 36,000 ---
Municipal taxes paid 1,500 2,500 3,000
Municipal taxes due but not paid 1,500 2,500 ---
Land revenue paid --- --- 600
Land revenue due but not paid 600 600 ---
Repair expenses 1,200 1,200 1,200
Nature of occupation Occupied for Letout for Used for
residence residence own business
On 1.4.2019 Mr. Viswas had borrowed a sum of Rs.2,50,000 bearing interest at 12%
p.a. for the construction of this building. The total cost of construction of the building
was Rs. 6,00,000. The business Income of Mr.Viswas for the year ended 31.3.2021 is
Rs. 1,05,000. Compute the Gross total Income of Mr. Viswas for the A.Y. 2021-22
Solution : Computation of Taxable Income from House Property
Assessee – Mr. Vishwas PY : 2020-21
Status – Resident AY : 2021-22

Particulars Amount Amount

House – 1 House – 2
Purpose of Use
SOP LOP
MRV NA
OR WEH
FRV 30000
NOTIONAL RENT 30,000
OR WEL
STANDARD RENT NA
EXPECTED RENT
30,000
OR WEH
ACTUAL RENT
36,000
(Annual Rent – Unrealised Rent – Common Facility
Cost)
GAV Before Vacancy Period Loss 36,000
Less : Vacancy Period Loss Nil
GROSS ANNUAL VALUE 36,000
Less : Municipal Tax Paid by Owner 2,500
NET ANNUAL VALUE
33,500
Less : Deductions u/s 24
c) Standard Deduction – 30% of NAV
10,050
d) Interest on Borrowed Capital 12000
12,000
iii) Pre-Construction Interest
iv) Previous Year Interest

TAXABLE INCOME FROM HOUSE PROPERTY (12000)

NET TAXABLE INCOME FROM HOUSE PROPERTY

()

Income from House Property for Unit III will be Nil.

Note : If any House property premises is used for own business, then it is recorded under income
from business or profession. But not recorded under Income from House Property.

Loan Taken on –

Construction completed – 01.04.2020

Pre-Construction Interest
2019-20 = 01/04/2019 to 31/03/2020 = 2.50,000 x 12/100 x 1 = 30,000

Total = Rs. 30,000

30,000 / 5 = Rs. 6,000

PY Interest
2020-21 = 01/04/2020 to 31/03/2021 = 2.50,000 x 12/100 x 1 = 30,000

Total Interest = 36,000 / 3 = 12,000

5. Akhila (resident) own three houses in Bangalore the municipal valuation of which are
Rs. 22,000, Rs. 36,000, Rs. 31,000 respectively. The following are further details
about three houses:
i) The first house built in 2011, has been let out on a monthly rent of Rs.3,500. The
expenses in connection with this house are: Interest on mortgage Rs.2,000, Land revenue
Rs. 100, Fire Insurance premium Rs. 800. Interest on loan for the construction of the house
Rs. 4,000. Municipal taxes Rs. 1,500. The house remained vacant for two months. Unrealised
rent of the current year amounts to Rs. 7,000. The assessing officer has been satisfied about
this unrealised rent.
ii) The second house was built in 1985 and it is used for owner's residential purposes. In
connection with this house Rs. 800 were spent on repairs, Rs. 200 were paid as fire
insurance premium. The house remained vacant for three months as the owner had to stay
in chennai in rented house in connection with her profession.
iii) The construction of third house was complete on 30th June 2014 and from 1st July 2014
it was let out for residential purpose on a rent of Rs. 2,500 p.m. Municipal tax Rs. 3,200 and
Interest on loan Rs.16,000 were paid during the year 2020-21. Compute her income from
house property for the assessment year 2021-22.
Solution : Computation of Taxable Income from House Property
Assessee – Akila PY : 2020-21
Status – Resident AY : 2021-22

Particulars Amount Amount Amount

House – 1 House – 2 House – 3

Purpose of Use
LOP SOP LOP
MRV 22,000 31,000
OR WEH
FRV NA NA
NOTIONAL RENT 22,000 31,000
OR WEL
STANDARD RENT NA NA
EXPECTED RENT
OR WEH 22,000 31,000
ACTUAL RENT
(Annual Rent – Unrealised Rent – Common Facility 35,000 30,000
Cost)
(3500 x 12 - 7,000 – Nil = 42,000 – 7,000 = 35,000)
(2,500 x 12 = 30,000)
GAV Before Vacancy Period Loss 35,000 31,000
Less : Vacancy Period Loss (2 months x 3,500) 7,000 Nil
GROSS ANNUAL VALUE 28,000 31,000
Less : Municipal Tax Paid by Owner 1,500 3,200
NET ANNUAL VALUE 26,500 NIL 27,800
Less : Deductions u/s 24
a) Standard Deduction – 30% of NAV 7,950 8,340
b) Interest on Borrowed Capital 4,000 NIL 16,000
v) Pre-Construction Interest
vi) Previous Year Interest

TAXABLE INCOME FROM HOUSE PROPERTY 14,550 NIL 3,460

NET TAXABLE INCOME FROM HOUSE PROPERTY

18,010
(14,550 + NIL + 3,460)

6. From the following particulars of house properties of Vishwanath (resident), Compute

his income from house property for A.Y.2021-22.
Particulars I House II House III House IV House
Municipal value 8,000 9,000 20,000 24,000
Annual rent SOP SOP 32,000 30,000
Local taxes paid 1,600 1,800 4,000 4,800 (Municipal tax)
Repair charges 1,000 ---- 3,000 ----
Insurance premium 50 150 200 500
Interest on loan for construction 1,180 ---- 1,800 4,200
Unrealized rent (2020-21) ---- ---- 3,000 ----
Vacancy period ---- ---- 3 months ----
The I and II house are self occupied. The III house is let out for residence and the IV house is
let out for business. In case of IV house the tenant paid the local taxes. House I occupied for
his residence and house II is occupied by his parents.
Solution : Computation of Taxable Income from House Property
Assessee – Vishwanath PY : 2020-21
Status – Resident AY : 2021

Particulars Amount Amount Amount Amount

House – 1 House – 2 House – 3 House – 4

Purpose of Use
DLOP SOP LOP LOP
MRV 8,000 9,000
OR WEH
FRV NA NA
NOTIONAL RENT 8000 9,000
OR WEL
STANDARD RENT NA NA
EXPECTED RENT 8,000 9,000
OR WEH
ACTUAL RENT NA NA
(Annual Rent – Unrealised Rent – Common
Facility Cost)
GAV Before Vacancy Period Loss 8,000 9,000
Less : Vacancy Period Loss (2 months x 3,500) NA NA
GROSS ANNUAL VALUE 8,000 9,000
Less : Municipal Tax Paid by Owner 1,600 NA
NET ANNUAL VALUE 6,400 NIL
Less : Deductions u/s 24
c) Standard Deduction – 30% of NAV 1,920
d) Interest on Borrowed Capital 1,180 NIL
vii) Pre-Construction Interest
viii) Previous Year Interest

TAXABLE INCOME FROM HOUSE PROPERTY 3,300 NIL

NET TAXABLE INCOME FROM HOUSE

PROPERTY
(3300 + Nil + _____ + _____)

7. Mr. Harish is the owner of following house property in Mysuru. Particulars in respect of
which for the year ended 31-3-2021 are as follows: (2015 & 2019 QP)
Compute his income from the house property the AY 2021-22
Particulars I House (Rs) II House (Rs) III House (Rs)
LOP LOP Dwelling House (SOP)
Annual rent for 12 months 24,000 18,000 Nil
Standard rent 18,000 12,000 Nil
Municipal value 16,000 14,000 35,600
Municipal Tax paid by Harish 1,600 700 3,560
Municipal Tax paid by tenant Nil 700 Nil
Repairs 1,000 500 2,000
Vacancy period 2 months Nil Nil
Interest on loan for repairing house 800 600 2,000
Unrealized rent allowed in the
A.Y.2018-19 recovered during
the year for the first house 4,000 Nil Nil

8. Mr. Anand is the owner of three houses in Bangalore, the particulars of

which are given below: (2017QP)
Particulars House 'A' House 'B' House 'C'
Municipal value 30,000 40,000 20,000
Fair rent 36,000 30,000 24,000
Let out (per month) 4,000 3,000 5,000
Construction completed 1-4-2018 1-6-2018 31-3-2017
Repairs --- 5,000 4,000
Municipal tax paid by owner 3,000 --- ---
Municipal tax paid by tenant --- --- 2,000
Municipal tax due --- 4,000 ---
Vacancy period --- --- 2 months
Anand took a loan of Rs. 3, 00,000 at 8.5% p.a. for construction of house 'B',
date of borrowing loan is 01-07-2015.
Compute taxable income from House property for the AY 2021-22.

Solution : Computation of Taxable Income from House Property

Assessee – Anand PY : 2020-21
Status – Resident AY : 2021-22

Particulars Amount Amount Amount

 House – 1 House – 2 House – 3
Purpose of Use
LOP SOP LOP
MRV 30,000 40,000 20,000
OR WEH
FRV 36,000 30,000 24,000
NOTIONAL RENT 36,000 40,000 24,000
OR WEL
STANDARD RENT NA NA NA
EXPECTED RENT 36,000 40,000 24,000
OR WEH
ACTUAL RENT
(Annual Rent – Unrealised Rent – Common Facility 48,000 36,000 60,000
Cost)
GAV Before Vacancy Period Loss
48,000 40,000 60,000
Less : Vacancy Period Loss
NIL NIL 10,000
(House C = 2 months x 5000 = 10,000)
GROSS ANNUAL VALUE 48,000 40,000 50,000
Less : Municipal Tax Paid by Owner 3,000 NIL NIL
NET ANNUAL VALUE 45,000 40,000 50,000
Less : Deductions u/s 24
e) Standard Deduction – 30% of NAV 13,500 12,000 15,000
f) Interest on Borrowed Capital NIL
ix) Pre-Construction Interest NIL 14,025
x) Previous Year Interest 25,500

TAXABLE INCOME FROM HOUSE PROPERTY

NET TAXABLE INCOME FROM HOUSE PROPERTY

Calculation of Interest

Date of borrowing loan = 01-07-2015

Construction completed = 01-06-2018
Note : If the date of repayment of loan is not given, then it is assumed that
loan has not been repaid and the interest on PY should be calculated at given
interest rate.
Pre-Construction Interest

2015-16 = 1-07-2015 to 31-03-2016 = 3,00,000 x 8.5/100 x 9/12 = 19,125

2016-17 = 1-04-2016 to 31-03-2017 = 3,00,000 x 8.5/100 x 1 = 25,500

2017-18 = 1-04-2017 to 31-03-2018 = 3,00,000 x 8.5/100 x 1 = 25,500

--------------------------------------------------------------------------------------------------

Total Pre-Construction Interest = 70,125

70,125 / 5 = 14,025

Previous Year Interest

2020-21 = 1-04-2020 to 31-03-2021 = 3,00,000 x 8.5/100 x 1 = 25,500