Special Cases

Income Tax
Income From House Property

Example of Such Property are

1. 2 Floors of same building . One self occupied One Rented
2. Front portion self occupied . Back portion Rented .

How to Compute Income from House Property

• Both are considered separate units
• and income from house property is calculated separately for both .
• Fair Rent, municipal value  municipal taxes are also divided  between different units

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QUESTION

Compute Income from House Property If Half the property Rented at 5000 pm.

Balance half self occupied

 Municipal value 100000 Fair Rent 80000 Standard Rent 90000 Municipal taxes paid 10000

We will compute Income from house Property for both portion separately

Income from Self Occupied portion

NAV=0 for one self occupied property

 Particulars Self Occupied Portion A Municipal value 50000 B Fair Rent 40000 C Higher of Municipal Value or Fair Rent 0 D Standard Rent 0 E Expected Rent (Lower of C or D 0 F Actual Rent 0 G GAV 0 (Higher of Expected or Actual Rent) Less H Municipal Taxes Paid I Unearned Rent J NAV 0 Less K Standard Deduction 30% 0 L Interest on Housing Loan 0 M income from House Property 0

Income from Rented Portion

 Particulars Rented Portion A Municipal value 50000 B Fair Rent 40000 C Higher of Municipal Value or Fair Rent 50000 D Standard Rent 45000 E Expected Rent (Lower of C or D) 45000 F Actual Rent 60000 G GAV 60000 (Higher of Expected or Actual Rent) Less H Municipal Taxes Paid 5000 I Unearned Rent 0 J NAV 55000 Less K Standard Deduction 30% 16500 L Interest on Housing Loan 0 M income from House Property 38500

Total Income from House Property= 0+38500=38500