Skip to content

CA Intermediate · Taxation · Income from House Property

Meera owns a house in Pune let out for the whole of tax year 2026-27. Annual rent fixed by the lease is Rs 3,00,000 and the municipal valuation is Rs 2,40,000. Fair rent is Rs 2,70,000 and standard rent under the Rent Control Act is Rs 2,50,000. The property is not vacant at any time. What is the gross annual value (expected rent) before considering actual rent received?

The expected rent is Rs 2,50,000. First take the higher of municipal value and fair rent, which is Rs 2,70,000, then restrict it to the standard rent of Rs 2,50,000 because the Rent Control Act caps the expected rent at that level.

  1. ARs 2,40,000
  2. BRs 2,50,000Correct
  3. CRs 2,70,000
  4. DRs 3,00,000

Explanation

Step 1: the higher of municipal value (2,40,000) and fair rent (2,70,000) is 2,70,000. Step 2: this is capped at standard rent of 2,50,000, so expected rent is 2,50,000. Choosing 2,70,000 is wrong because it ignores the standard rent ceiling. Actual rent of 3,00,000 exceeds this, so GAV would be 3,00,000 if no loss from vacancy.

Did you get it right without looking?

One question tells you little. A timed set on Income from House Property shows your real accuracy, how long you take and where you lose marks.

Practise Income from House PropertyFree diagnostic mock

More Income from House Property questions