Standard Deduction-30% of NAV

  • The owner of the house incurs lots of expenses on  repairs or maintainance of house
  • For all these expenses, a flat deduction of 30% from NAV is allowed
  • Hence, Expenses of repair and maintainance or insurances premium are not allowed .
  • Note : – If such expenses are given in question ,We have to ignore them and to allow a flat 30% deduction on NAV 
  • Even if no expenses are incurred , still 30% deduction allowed

Assuming No Interest on Housing Loan

   
NAV xx
Less xx
Standard Deduction 30% xx
Income from House Property xx

 

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

Q1

   
NAV 400000
Repairs done for house 30000
Ground Rent Paid 5000

Calculate income from house property 

--answer--

   
NAV 400000
LESS  
Standard Deduction 30% -120000
Income from House Property 280000

No deduction for repairs and ground rent,only 30% deduction

--endanswer--

 

Q2

Solve last question assuming no repairs done or ground rent paid

NAV=400000

--answer--

Same as last 

Even if no expenses are incurred , still 30% deduction allowed

--endanswer--

 

Q3

   
Municipal valuation  1000000
Fair Rent  900000
Standard Rent  800000
Actual Rent 840000
(70000*12)  
Unrealized Rent 70000
Municipal taxes due 10000
(Paid Rs 8000)  
Ground Rent 7000
Insurance premium 3000
Repair done 20000
Calculate income from house property 

--answer--

     
A Municipal valuation  1000000
B Fair Rent  900000
C Higher of Municipal Value or Fair Rent 1000000
D Standard Rent 800000
E Expected Rent (Lower of C or D) 800000
F Actual Rent 840000
E GAV 840000
  (Higher of Expected or Actual Rent)  
  Less  
F Municipal Taxes Paid -8000
G Unearned Rent(40000*1) -70000
H NAV 762000
  Less  
I Standard Deduction -228600
  (30%*762000)  
J Interest on Housing Loan  
K income from House Property 533400

--endanswer--

 

 

  1. Income Tax
  2. Income From House Property
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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