16 July 2009
Ramesh owns a property.It is given on rent (rent being Rs10,000 p.m)to a bank.Municipal Value of the property is Rs 1,50,000.Fair rent is Rs 1,60,000 and standard rent is Rs1,50,000.Municipal tax paid by Ramesh is as follows-
Rs 26,000 on March 3,2008 and Rs 35,000 on May 10,2008.On May 1,2008 rent is increased from Rs 10,000 to Rs 15,000,with retrospective effect from 01-04-2007.Arrears of rent 2007-08 are paid in May 1,2007.what is the income chargeable to tax for the Assessment Years,2008-09 and 2009-10.
Municipal Value 150000 Fair Rent 160000 Standard Rent 150000
(I) (Municipal Value or Fair Rent whichever is higher subject to maximum of standard rent) 150000
Actual Rent 120000
Annual Value: Value in (I) or actual rent whichever is greater
Gross Annual Value 150000 Less: Municipal Taxes paid 26000 Net Annual Value 124000
Less: Deduction U/s 24 a.30% of the Annual Value 37200 b.Interest on housing loan nil 37200 Income from House Property 86800
Tax: Nil as income less than exemption limit assuming no other source of income
Assessment Year 2009-10
Annual Value of the House:
Municipal Value 150000 Fair Rent 160000 Standard Rent 150000
(I) (Municipal Value or Fair Rent whichever is higher subject to maximum of standard rent) 150000
Actual Rent 180000
Annual Value: Value in (I) or actual rent whichever is greater
Gross Annual Value 180000 Less: Municipal Taxes paid 35000 Net Annual Value 145000
Less: Deduction U/s 24 a.30% of the Annual Value 43500 b.Interest on housing Loan nil 43500 101500 Add: Arrears of Rent U/s 25B 60000 Income from House Property 161500
Tax: Rs. 1150 assuming no other source of income
Revised Return for Assessment Year 2008-09
Annual Value of the House:
Municipal Value 150000 Fair Rent 160000 Standard Rent 150000
(I) (Municipal Value or Fair Rent whichever is higher subject to maximum of standard rent) 150000
Actual Rent 180000
Annual Value: Value in (I) or actual rent whichever is greater
Gross Annual Value 180000 Less: Municipal Taxes paid 26000 Net Annual Value 154000
Less: Deduction U/s 24 a.30% of the Annual Value 46200 b.Interest on housing loan nil 46200 Income from House Property 107800
Tax: Nil as less than exemption limit assuming no other sources of income
My advise is to file a revised return as it saves tax but of course considering that last date of filing revised return has not passed.
CAclubindia
