house property
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
22 February 2011
Mr. Parampal singh own a house property consisting of 4 equal independent units in CHD. it was completed on 1-11-08 and is used
as follows: (a) 25% for his own resident is self occupied. (b) 25% for his own business.
(c) 25% is let out for residential purpose @ 1,000 p.m. (d) 255 was let out for non residential purpose @1,000 p.m with
effect from 1-04-09 to 28-02-10 and self occupied from 1-03-10 onwards.
the other expenses incurred in respect of H.P. are:
Municipal Taxes4,000 p.a.
fire insurance premium Rs, 1,200 p.a
Repairs of house property3,200 p.a
Interest on loan for construction of house3,6000
Compute income under the head house property for the assessment year 2010-11
PLEASE SOLVE THIS QUESTION
as follows: (a) 25% for his own resident is self occupied. (b) 25% for his own business.
(c) 25% is let out for residential purpose @ 1,000 p.m. (d) 255 was let out for non residential purpose @1,000 p.m with
effect from 1-04-09 to 28-02-10 and self occupied from 1-03-10 onwards.
the other expenses incurred in respect of H.P. are:
Municipal Taxes4,000 p.a.
fire insurance premium Rs, 1,200 p.a
Repairs of house property3,200 p.a
Interest on loan for construction of house3,6000
Compute income under the head house property for the assessment year 2010-11
PLEASE SOLVE THIS QUESTION
22 February 2011
Hi
Will get back to u with complete wrkngs & Info
Thank you
Regards
CA.Lohith.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITR Hons
Will get back to u with complete wrkngs & Info
Thank you
Regards
CA.Lohith.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITR Hons
28 July 2024
To compute the income under the head "House Property" for Mr. Parampal Singh for the assessment year 2010-11, we need to consider the following details and calculations:
### **Details:**
1. **House Property Breakdown:**
- **Self-Occupied (SO):** 25% of the property.
- **Business Use (BU):** 25% of the property.
- **Let Out (LO) - Residential:** 25% of the property, rented at ₹1K per month.
- **Let Out (LO) - Non-Residential:** 25% of the property, rented at ₹1K per month from 01-Apr-2009 to 28-Feb-2010, then used for self-occupation from 01-Mar-2010.
2. **Expenses:**
- **Municipal Taxes:** ₹4K per annum
- **Fire Insurance Premium:** ₹1,200 per annum
- **Repairs:** ₹3.2K per annum
- **Interest on Loan:** ₹36K
### **Calculation:**
#### **1. Compute Gross Annual Value (GAV) for Let Out Portions**
- **Residential Portion (25%):**
- Rent per month: ₹1K
- Annual Rent: ₹1K × 12 = ₹12K
- **Non-Residential Portion (25%):**
- Rent per month: ₹1K
- Duration: 01-Apr-2009 to 28-Feb-2010 (11 months)
- Annual Rent for this period: ₹1K × 11 = ₹11K
**Since the non-residential portion is occupied by Mr. Parampal Singh from 01-Mar-2010 onwards, rental income for this period will be ignored for the current financial year.**
**Thus, the GAV will be the total of the residential rental income and the non-residential rental income received during the financial year.**
- **GAV Calculation:**
- Residential Rent: ₹12K
- Non-Residential Rent (only for 11 months in FY 09-10): ₹11K
**Total GAV = ₹12K + ₹11K = ₹23K**
#### **2. Compute Net Annual Value (NAV)**
- **Municipal Taxes:** ₹4K (deductible)
- **NAV Calculation:**
- NAV = GAV - Municipal Taxes
- NAV = ₹23K - ₹4K = ₹19K
#### **3. Compute Income from House Property**
- **Income from Let Out Portion:**
- **NAV:** ₹19K
- **Less: Standard Deduction (30% of NAV):** 30% of ₹19K = ₹5.7K
- **Interest on Loan for Construction:** ₹36K (deductible under section 24(b) for let-out property)
**Note:** The loan interest can be claimed fully against the rental income, as there are no restrictions on the amount for let-out properties.
- **Income Calculation:**
- Income from Let Out Portion = NAV - Standard Deduction - Interest on Loan
- Income from Let Out Portion = ₹19K - ₹5.7K - ₹36K
- Income from Let Out Portion = -₹22.7K (a loss)
**This loss can be set off against other income under the head "Income from House Property" or carried forward as per IT rules.**
#### **4. Compute Income for Self-Occupied and Business Use**
- **Self-Occupied Portion (25%):**
- No rental income, hence no income or deduction applicable.
- **Business Use Portion (25%):**
- The portion used for business cannot be treated as income from house property. Expenses related to business use can be accounted for in the business accounts.
### **Summary of Income from House Property for AY 2010-11:**
- **Income from Let Out Portion:** Loss of ₹22,700
- **Income from Self-Occupied Portion:** Nil
- **Income from Business Use Portion:** Nil
**Therefore, the overall computation of income under the head "House Property" will reflect a loss of ₹22,700. This loss can be adjusted against other heads of income or carried forward as per tax regulations.**
**Ensure to keep all relevant documents and proof for deductions and claims as per the Income Tax Act. For precise calculations and compliance, consider consulting a tax advisor or CA.**
### **Details:**
1. **House Property Breakdown:**
- **Self-Occupied (SO):** 25% of the property.
- **Business Use (BU):** 25% of the property.
- **Let Out (LO) - Residential:** 25% of the property, rented at ₹1K per month.
- **Let Out (LO) - Non-Residential:** 25% of the property, rented at ₹1K per month from 01-Apr-2009 to 28-Feb-2010, then used for self-occupation from 01-Mar-2010.
2. **Expenses:**
- **Municipal Taxes:** ₹4K per annum
- **Fire Insurance Premium:** ₹1,200 per annum
- **Repairs:** ₹3.2K per annum
- **Interest on Loan:** ₹36K
### **Calculation:**
#### **1. Compute Gross Annual Value (GAV) for Let Out Portions**
- **Residential Portion (25%):**
- Rent per month: ₹1K
- Annual Rent: ₹1K × 12 = ₹12K
- **Non-Residential Portion (25%):**
- Rent per month: ₹1K
- Duration: 01-Apr-2009 to 28-Feb-2010 (11 months)
- Annual Rent for this period: ₹1K × 11 = ₹11K
**Since the non-residential portion is occupied by Mr. Parampal Singh from 01-Mar-2010 onwards, rental income for this period will be ignored for the current financial year.**
**Thus, the GAV will be the total of the residential rental income and the non-residential rental income received during the financial year.**
- **GAV Calculation:**
- Residential Rent: ₹12K
- Non-Residential Rent (only for 11 months in FY 09-10): ₹11K
**Total GAV = ₹12K + ₹11K = ₹23K**
#### **2. Compute Net Annual Value (NAV)**
- **Municipal Taxes:** ₹4K (deductible)
- **NAV Calculation:**
- NAV = GAV - Municipal Taxes
- NAV = ₹23K - ₹4K = ₹19K
#### **3. Compute Income from House Property**
- **Income from Let Out Portion:**
- **NAV:** ₹19K
- **Less: Standard Deduction (30% of NAV):** 30% of ₹19K = ₹5.7K
- **Interest on Loan for Construction:** ₹36K (deductible under section 24(b) for let-out property)
**Note:** The loan interest can be claimed fully against the rental income, as there are no restrictions on the amount for let-out properties.
- **Income Calculation:**
- Income from Let Out Portion = NAV - Standard Deduction - Interest on Loan
- Income from Let Out Portion = ₹19K - ₹5.7K - ₹36K
- Income from Let Out Portion = -₹22.7K (a loss)
**This loss can be set off against other income under the head "Income from House Property" or carried forward as per IT rules.**
#### **4. Compute Income for Self-Occupied and Business Use**
- **Self-Occupied Portion (25%):**
- No rental income, hence no income or deduction applicable.
- **Business Use Portion (25%):**
- The portion used for business cannot be treated as income from house property. Expenses related to business use can be accounted for in the business accounts.
### **Summary of Income from House Property for AY 2010-11:**
- **Income from Let Out Portion:** Loss of ₹22,700
- **Income from Self-Occupied Portion:** Nil
- **Income from Business Use Portion:** Nil
**Therefore, the overall computation of income under the head "House Property" will reflect a loss of ₹22,700. This loss can be adjusted against other heads of income or carried forward as per tax regulations.**
**Ensure to keep all relevant documents and proof for deductions and claims as per the Income Tax Act. For precise calculations and compliance, consider consulting a tax advisor or CA.**
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