INCOME TAX

ASSESSMENT YEAR 2023-24

INCOME FROM HOUSE PROPERTY

Problems on Computation of Income from House Property

1. On 1st April 2022, Sri Bhupesh is the owner of a house which is let out to Sri Mohanlal on
a monthly rent of Rs. 7,500 and received 3 months advance rent and Rs. 12,000 as
depoist. The Municipal Rental Value is Rs. 60,000 p.a. and rent of similar building is Rs.
8,000 p.m. Sri Bhupesh incurs the following expenses : Municipal taxes Rs. 6,000 ;
Insurance (fire) Rs. 300 ; Interest on loan taken to construct the house Rs. 14,000 ;
Ground rent Rs. 250 ; Repairs Rs. 3,000 and collection charges Rs. 500. compute the
income from house property for the current assessment year.

2. Mr. Raghava Reddy is the onwer of a house property whose municipal valuation is Rs.
2,50,000 p.a. (Standard Rent Rs. 3,60,000 p.a.) is let out on a monthly rent of Rs. 25,000
and Fair Rental Value is Rs. 2,10,000 p.a. Municipal taxes due Rs. 30,000 out of which
Rs. 15,000 is paid so far. Other expenses : Repairs Rs. 4,000 ; Insurance Rs. 1,025
and interest on loan to purchase the house Rs. 45,000. The tenant has not yet paid last 1
month rent. Find out the income from house property for the current assessment year.

3. Sri Sunil Kumar a senior citizen owns a house in Chennai. It has been let out on a monthly
rent of Rs. 10,500 and Rs. 2,000 p.m. towards service charges. Municipal Rental Value
Rs. 7,500 p.m. and rent of similar house Rs. 10,000 p.m. Standard Rent Rs. 8,400 p.m.
The owner incurs the following expenses : Local taxes Rs. 12,960 ; Lift Maintenance Rs.
6,200 ; Water charges Rs. 2,000 ; Repairs Rs. 13,000 and interest paid on loan taken to
construct the house Rs. 9,600 (including the penal interest of Rs. 1,000). Compute the
income from house property.

4. From the particulars given below compute the income from house property for the current
assessment year of Smt. Manisha.
Municipal Value = Rs. 40,000
Rent Received (due Rs. 5,000) = Rs. 55,000
Date of completion of construction = 31-8-2022.
Land Revenue = 600
Municipal Taxes = 10 %
Fair Rent = Rs. 72,000
Nature of use = Let out for commercial purpose
Repairs = Rs. 2,000
Ground Rent = Rs. 400
Cost of facilities provided to the tenant = Rs. 4,600.
Note :
(a) Municipal taxes and repair expenses are paid by the tenant.
(b) The house is constructed by taking a loan of Rs. 5,00,000 @ 15 % on 1-11-2020
and no amount of principal is repaid so far interest is paid as and when it is due.
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5. On 1-4-2022 Mr. Manohar purchased a house in Hyderabad for residential purpose for Rs.
23 lakhs, for this he took a loan @ 10 % from Central Bank of India. Which has been let
out to Mr. K.R. Reddy on a monthly rent of Rs. 20,000. The house was occupied
throughout the year. The municipal valuation is Rs. 1,20,000. Municipal Taxes 10 %.
Standard Rent Rs. 1,50,000. Mr. K.R. Reddy could have obtained a similar house at a rent
of Rs. 14,000 p.m. During the year Mr. K.R. Reddy did not pay the rent for the month of
March and vacated the house. Compute income from house property.

6. Mrs. Sandhya of 45 years of age owns a house which was let out to Mrs. Devi on a rent of
Rs. 10,000 p.m. Municipal value of it is Rs. 1,00,000 and Fair Rental Value is Rs.
1,10,000. Standard Rent Rs. 75,000. Mrs. Devi did not pay the rent for July and so was
made to vacate on 31-7-2022. On 1st August she let out to Mrs. Shanti on a rent of Rs.
9,000 p.m. Expenses incurred during the previous year are : Repairs Rs. 8,000 ;
Municipal Taxes Rs. 15,000 ; interest on loan taken to construct the house Rs. 70,000.
Calculate income from house property.

7. Sri P.S. Reddy is the owner of a house property, consisting of building, open land for car
parking and kitchen garden. The building is let out for residential purpose on a monthly rent
of Rs. 18,000 ; Municipal valuation is Rs. 2,00,000 ; rent for similar building is Rs.
20,000 p.m. The open land is let out on a monthly rent of Rs. 5,000 to run a car parking
business. During the previous year the house was vacant for one month. The rate of
municipal taxes is 15 %. He constructed the house by raising a loan from HDFC and the
interest paid during the previous year is 12 % on the outstanding amount of Rs. 2,00,000.
The other expenses are : Fire insurance Rs. 800 ; Collection charges Rs. 1,000 ;
Repairs Rs. 3,000 ; Ground Rent Rs. 2,500 and brokerage paid to raise loan Rs. 750.
Compute income from house property.

8. On 2-04-2022, Mr. Kiran purchased a residential house in Bidar for Rs. 27 lakhs and he
took a loan of Rs. 18 lakhs from Karnataka Housing Corporation @ 10 %. Compute the
income from house property for the current assessment year. The municipality has fixed
the value at Rs. 1,00,000 ; the Fair Rental Value is Rs. 1,05,000. He has let out the
house for residential purpose. During the previous year the house was vacant for 2
months and he paid the following expenses : Repairs Rs. 7,000 ; ground rent Rs. 840 ;
municipal taxes Rs. 4,500 ; Collection charges Rs. 40. Interest on loan is due but not
yet paid. Actual rent received during the year Rs. 1,80,000.

9. Sri Atmakaran Reddy owns two houses, their municipal valuation are Rs. 30,000 and Rs.
48,000. The first house is let out for residential purpose for Rs. 46,000 p.a. and the
second house is let out to a company for its registered office Rs. 54,000 p.a. Under the
agreement 50 % of the municipal taxes are to be borne by the tenant. He claims the
following deductions : for the first house municipal taxes Rs. 3,000 ; repairs Rs. 12,000 ;
brokerage paid to get tenant Rs. 3,000. For the second house municipal taxes Rs. 5,000 ;
repairs Rs. 2,800 ; rent deed registration charges Rs. 1,000 ; annual charges Rs. 1,000 ;
interest on loan taken to purchase the second house Rs. 30,000 but only Rs. 10,000 is
paid so far. Arrears of rent received from first house Rs. 15,000 which was not assessed
earlier. The second house was vacant for 3 months. Compute the income from house
property.
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10. Mr. Vishal Maheshwari owns a house whose Municipal value is Rs. 1,40,000. Fair Rental
Value is Rs. 1,38,000. He let out the house to Smt. Parameshwari for an annual rent of
Rs. 1,80,000. The tenant could not pay the rent for the month of February and so was
made to vacate the house. The house remained vacant for March. As per rental deed the
municipal taxes are to be borne by the tenant, but Smt. Parmeshwari failed to pay as such
the dues were paid by the owner. Municipal Taxes at 15 %. Interest on loan taken
amounted to Rs. 50,000 (loan taken for repairs). Compute the income from house
property of Mr. Vishal Maheshwari.

11. Sri Indhra Mohan constructed a house in Delhi in 2010 and transferred the house for a
consideration of natural love and affection to his wife presently the house is let out on a
monthly rent of Rs. 30,000 (including Rs. 5,000 for services provided) for residential
purpose. Municipal Rental Value is Rs. 2,00,000. The municipal taxes are 10 %. It is
agreed that the tenant should bear the cost of repairs and the owner provided the following
facilities. Gardeners salary Rs. 12,000 to maintain the lawns, Water charges Rs. 2,400 ;
other expenses incurred by the owner are : Insurance Premium Rs. 3,000 ; collection
charges Rs. 2,500 ; Interest on loan for constructing the house Rs. 30,000. During the
previous year the house was vacant for two months. Calculate the income from house
property.

12. Smt. Indira is the owner of two house properties. From the following particulars compute
the income from house property, tax liability if income from profession Rs. 6,09,300 and
qualified saving Rs. 1,00,000.
House I House II
Date of purchase 15-1-2010 7-7-2011
Municipal Rental Value 1,10,000 1,50,000
Fair Rental Value 2,52,000 1,40,000
Standard Rental Value 1,70,000 2,10,000
Actual Rent Received 2,40,000 1,65,000
Interest paid on loan taken to repair the house 40,000 30,000
Municipal Taxes 10 % 12 %
Unrealized Rent 30,000 26,000
Vacancy loss 10,000 12,000
Outstanding Rent Nil 15,000
The second house is purchased for a price of Rs. 14,00,000 and part payment is made to
the vendor and interest due Rs. 30,000 is outstanding.

13. Sri Venkat Reddy purchase a house in Kakinada in the year 1997 and using for his
residential purpose. During the previous year relevant to the current assessment year, the
following particulars are furnished. Compute the income from house property. Municipal
Rental Value Rs. 25,000 ; Rent of similar building Rs. 30,000, expenses paid for
municipal taxes Rs. 2,500 ; Non agricultural land tax Rs. 1,000 ; Repairs Rs. 2,800 ;
Insurance Rs. 500 and Interest paid on loan taken to purchase the house Rs. 40,000.

14. Sri Arunachalam purchased a house in Pune on 1-7-2011. He is using the house
completely for his residential purpose. The Fair Rental Value of the house is Rs. 1,00,000,
while the Municipal Rental Value is Rs. 80,000 p.a. During the previous year he has paid
Municipal taxes Rs. 12,000 ; Land Revenue Rs. 3,000 and Interest on loan taken to
purchase the house Rs. 1,50,500. Compute his income from house property.
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15. Sri Srikanth owns a house at Jaipur. Municipal Value Rs. 65,000 and Fair Rental Value
Rs. 78,000. During the previous year the house is used for his residential purpose. During
the previous year the house is mortgaged with a bank for a loan of Rs. 5,00,000 @ 15 %
interest to renovate the house. Compute income from house property for the current
assessment year.

16. Sri Uma Maheshwar Rao, on 1st June 2022, he purchsed a flat in Sri Satya Sai residential
complex for his residence for Rs. 38 lakhs. He availed a housing loan from ICICI Bank
Rs. 24 lakhs @ 14 %. Compute his income from house property for the current
assessment year.

17. Mr. Mahesh Chandra has built a house on a leasehold land. He has let out the building on
a monthly rent of Rs. 18,500. Municipal Value Rs. 7,000 p.m. and Fair Rental Value Rs.
9,000 p.m. During the previous year his expenses on house on rent received are municipal
taxes 8 %, staff security maintenance 10 %, repairs 15 %, insurance 3 %. Interest paid
on loan taken to construct the house 8 % on outstanding loan Rs. 9,00,000. Compute
income from house property for the current assessment year.

18. Sri Vimal Chpra is owning three houses. All the houses are used by him for his residential
purpose. From the following particulars advice him in selecting his option for self occupied
properties.
House 1 House 2 House 3
Municipal Rental Value 10,000 p.m. 9,000 p.m. 8,000
p.m.
Fair Rental Value 12,500 p.m. 10,000 p.m. 9,000
p.m.
Municipal Taxes paid 18,000 16,200 15,000
Interest on loan taken to repair the house 14,000 20,000 30,000
Insurance 500 800 600

19. Mr. John Mitra who is having income from all other heads, as Rs. 2,50,000 owns three
house properties. He uses all the houses for his residential purpose. From the following
particulars submitted to you advise him in exercising the option with regard to self occupied
property.
House 1 House 2 House 3
Cost of the house 18,00,000 21,00,000 20,00,000
Municipal Rental Value 10,00,000 17,50,000 15,00,000
Fair Rental Value 12,50,000 20,00,000 17,50,000
Municipal Taxes due but not paid 10 % 10 % 10 %
Interest on loan taken to purchase
- the house 1,00,000 1,50,000 1,50,000
Insurance 1% 1% 1%
Depreciation 5% 5% 5%

20. Smt. Mamata is the owner of a house. During the previous year she has let out on a
monthly rent of Rs. 3,000. The Municipal Rental Value is Rs. 30,000 p.a. and rent of
similar building is Rs. 35,000 p.a. Smt. Mamata incurred the following expenses :
Municipal Taxes Rs. 4,000, Insurance Rs. 300, Interest on loand taken to construct the
house Rs. 5,000, Ground Rent Rs. 250, Repairs Rs. 4,000 and Collection Charges Rs.
500.

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During the previous year the house was let out for first 9 months and thereafter Smt.
Mamata occupied for her residential purpose. Compute Income from House Property for
the current assessment year.