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CA Intermediate · Taxation · Income from House Property

Mr. Dev Patel owns two houses in Surat, both self-occupied throughout tax year 2026-27. House A has interest on borrowed capital of Rs 1,80,000 and House B has interest of Rs 90,000. Municipal values are Rs 2,00,000 and Rs 1,50,000. He opts to treat both as self-occupied and has no other house property. What is his income from house property?

The loss is Rs 2,00,000. Both houses are self-occupied so their annual value is nil, and the interest of Rs 2,70,000 in total is restricted to the overall limit of Rs 2,00,000 for self-occupied property.

  1. ALoss of Rs 2,00,000Correct
  2. BLoss of Rs 2,70,000
  3. CLoss of Rs 1,80,000
  4. DNil

Explanation

Annual value of a self-occupied house is nil, so each house shows only interest as a loss. Total interest = 1,80,000 + 90,000 = 2,70,000, but the deduction for interest on self-occupied property is capped at Rs 2,00,000 in aggregate. So the loss is Rs 2,00,000. Option 2 ignores the cap.

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