WORKSHEET-UNIT 2-INCOME FROM HOUSE PROPERTY

1. Ms. Lakshmi has a house property whose MV is Rs 2,50,000 p.a.The fair rent is Rs
2,00,000 p.a and the Standard rent fixed by the Rent Control Act is Rs 2,10,000 p.a.The
property was let out for a rent of Rs 20,000 p.m.However,the tenant vacated the
property on 31.1.21.Unrealised Rent was Rs 20,000 and all conditions prescribed by
Rule 4 are satisfied.She paid Municiapl taxes @8% of municipal valuation.Interest on
borrowed capital was Rs 65,000 for the year.Compute the Income under the head House
Property of Ms Lakshmi for AY 2021-22.
2. Mr Gupta owns a House Property at Madurai. The Municipal Value of the property is
Rs 5,00,00,fair rent is Rs 4,20,000 and Standard Rent is Rs 4,80,000.The property was
let out for Rs 50,000 p.m upto Dec 2020.Thereafter the tenant vacated the property and
he used the house for self-occupation. Rent for the months of November and December
2020 could not be realized inspite of the owners efforts. All the conditions prescribed
under Rule 4 are satisfied.He paid Municipal taxes @12% during the year.He had paid
interest of Rs 25,000 during the year for amount borrowed for repairs for the House
property.Compute his Income under the head House Property for AY 2021-22
assuming that he does not opts to be taxed u/s 115BAC.
3. Mr P has one house property in Mumbai. He stays with his family in the house. The
rent of similar property is neighborhood is Rs 25,000 p.m. The Municipal Valuation is
Rs 23,000 p.m. Municipal Taxes paid is Rs 8,000.The House Construction began in
April 2014 with a loan of Rs 20,00,000 taken from LC Housing Finance Ltd @9% on
1.4.2014.The construction was completed on 30.11.2016.The accumulated interest up
to 31.3.2016 is Rs 3,60,000. On 31.3.2021, Mr P paid Rs 2,40,000 which included Rs
1,80,000 as interest for the year 20-21. Compute Mr P’s income from House Property
for AY 2021-22 assuming that (a)he opts to be taxed u/s 115BAC (b) he does not opts
to be taxed u/s 115 BAC.
4. Mr Dukhi is a co owner of a house property and holds 60% ownership alongwith his
brother holding the remaining 40% share in the property. Foll are the further details:

Municipal Value of the property Rs 1,60,000

Fair Rent Rs 1,50, 000
Standard Rent under the Rent Control Act Rs 1,70, 000
Rent received Rs 15,000 p.m
The loan for the construction of this property was jointly taken and the interest charged
by the bank is Rs 25,000, out of which Rs 21,000 has been paid during the year. Interest
on the unpaid interest of Rs 450.To repay this loan, Mr Dukhi and his brother have
taken a fresh loan and interest charged on this loan is Rs 5,000.The municipal taxes of
Rs 5100 have been paid by the tenant.
Compute the Income under the head House property of Mr Dukhi for AY 21-22
 5. Two brothers Crazy and Lazy are co-owners of a House Property. The property was
constructed during the FY 98-99.The property consists of eight identical units and is
situated in Cochin.

During the financial year 2020-21, each co owner occupied one units for residence and the
balance six units were let out at a rent of Rs 13,000 per month per unit. The Municipal
Value of the house property is Rs 9,00,000 and the Municipal Taxes are 20% of Municipal
Value, which were paid during the year. The other expenses were as follows:
 Repairs Rs 40,000
 Fire Insurance Premium paid Rs 15,000
 Interest on loan taken for the construction of the house Rs 3,00,000

One of the let out units remained vacant for four months during the year.
Crazy could not occupy his unit for 6 months as he was transferred to Chennai.
The Income from other sources of Crazy and Lazy are Rs 5,67,000 and Rs 3,45,000
respectively.
Compute the Total Income of both brothers for the PY 20-21 assuming that Mr Crazy does
not opts to be taxed u/s 115 BAC and Mr Lazy opts to be taxed u/s 115BAC.
6. Mrs Gupta,a citizen of U.S.A,is a resident and ordinarily resident in India during the
Financial Year 2020-21.She owns 2 House Properties at Los Angeles,U.S.A,which is
used as her residence.The annual value of per house is $ 20,000.The exchange rate may
be considered as 1$=rs 75.

She took ownership and possession of a flat in Chennai on 1.7.20120,which is used for self
occupation,while she is in India.The flat was used by her for 7 months only during the year
ended 31.3.2021.The Municipal valuation is Rs 32,000 p.m and the fair rent of Rs 4,20,000
p.a.She paid Rs 18,000 as Municiapal Taxes during the year.
She has borrowed a loan from Standard Chartered Bank in June 2018 for purchsing this
flat.Interest on loan was as under:
Period prior to 1.4.2020: Rs 49,200
1.4.2020 to 30.6.2020:Rs 50,800
1.7.2020 to 31.3.2021:Rs 1,31,300
She has a House property in bangalore,which was sold in March 2016.In respect of this
house,she received arrears of Rent of Rs 90,000 in March 2021.This amount has not been
charged to tax earlier.
Compute the Income chargeable from House Property of Mrs Gupta for AY 2020-21.

7. Mr Dinesh has three houses, all of which are self occupied.The particulars of the houses
for PY 20-21 are as under:
 House I House II House III
Municipal Valuation p.a Rs Rs 3,60,000 Rs 3,30,000
3,00,000
Fair Rent p.a Rs Rs 2,75,000 Rs 3,80,000
3,75,000
Standard Rent p.a Rs Rs 3,70,000 Rs 3,75,000
3,50,000
Date of completion/purchase 31.3.1999 31.3.2001 01.04.2014
Municipal Taxes paid during the year 12% 8% 6%
Interest on money borrowed for repair of - 55,000 -
property during the current year
Interest for current year on money borrowed - - 1,75,000
in July 2014 for purchase of property

Compute Dinesh’s Income from House Property for AY 2021-22 and suggest which houses
should be opted by him to be assessed as self-occupied so that his tax liability is minimum
assuming that (a)he opts to be taxed u/s 115 BAC (b) he does not opts to be taxed u/s 115BAC.

8. Mr T owns a house property whose Municipal Value, Fair Rent and Standard Rent are
Rs 96,000, Rs 1,26,000 and Rs 1,08,000 respectively.

During the Financial year 20-21, one third of the portion of the house was let out for
residential purpose at a monthly rent of Rs 6,000.The remaining two-third portion was self
occupied by him. Municipal tax @11% of municipal value was paid during the year.
The construction of the house began in June 2013 and was completed on 31.5.2016.Mr T
took a loan of Rs 1,00,000 on 1.7.2013 for the construction of building.
He paid interest on loan @12% p.a and every month such interest was paid.
Compute Income from House Property of Mr T for the AY 2021-22 assuming that he does
not opts to be taxed u/s 115BAC.
9. Arjun owns a House Property, construction of which was completed on 1.10.1997,
half of the house was let out @Rs 10,000 p.m. This portion was, however, vacant for
3 months.25% of the house was used by the owner for residence and 25% for business
for the full year. Other expenses of the house were:

Municipal Taxes Paid : Rs 2,000

Repairs: Rs 16,000
Interest on loan (for PY 20-21)taken for construction Rs 10,000
Fire Insurance Premium Rs 6,000
Calculate the income from House Property of Mr Arjun for AY 2021-22.
 10. Mr Ravi (ROR) owns a building consisting of 4 houses. The particulars are as
follows. Compute his Income from HP for AY 2021-22 assuming that he does not
opts to be taxed u/s 115 BAC.

Particulars House 1 House 2 House 3 House 4 House 5

Municipal Rs 1,20,000 Rs 1,32,000 Rs 10,80,000 Rs 2,20,000 Rs 15,00,00
Value
Fair Rent Rs 1,50,000 Rs 1,60,000 Rs 12,00,000 Rs 2,50,000 RS
13,00,000
Standard NA Rs 1,55,000 Rs 10,00,000 Rs 2,48,000 Rs 12,75,000
Rent
Actual rent - Rs 14,000 - Rs 15,000 -
p.m
Vacancy 1 month - - -
Period
Purpose of SO LO SO Note 1 SO
Use
Unrealised - - - Rs 6,000 -
Rent
Municipal Rs 9,600 Rs 4,000 Rs 42,000 Rs 1,000 Rs10,000
Tax (paid by
Mr Ravi)
Municipal - Rs 6,000 - Rs 11,000 -
Tax (paid by
tenant)
Interest on
loan :
a.for the year
2020-21. - Rs 8,600 Rs 1,00,000 Rs 3,900 Rs 35,000
b.For
construction
period Rs 10,000 Rs 25,000 Rs 2,10,000 - Rs 1,00,000

Note 1:60% of the Property was Let out to Mr Kishan for his business and the remaining was
used by Mr Ravi for his own business. Mr Kishan had further let it out to Ms PeeCee at a rent
of Rs 18,000 p.m
The loan was borrowed for acquisition of properties and the properties were acquired during
the year 2017-18.
 PRACTICE QUESTIONS
1. Mr X owns a house in Delhi.During the PY 20-21.3/4th portion of the house was self
occupied for full year and 1/4th portion was let out for residential purposes from
1.4.2020 to 31.12.2020 on a rent of Rs 7,000 p.m.From 1.1.2021 this portion was also
used for his own residence.Municipal Valuation of the house is Rs 2,00,000.He incurred
the following expenditure in respect of the House property:

Municipal Taxes due Rs 60,000

Repairs Rs 20,000
Fire Insurance Premium Rs 35,000
Land Revenue Rs 40,000
Ground Rent Rs 2,000 were paid during the year.A Loan of Rs 10,00,000 was taken on 1.4.2015
@ 9% p.a for the construction of the house which was completed on 28.3.2016.Nothing was
repaid on loan account so far.
Find out his Income from House Property for AY 2021-22 assuming that he does not opts to
be taxed u/s 115 BAC.
Ans Rs -31,200

Will give more practice questions later.