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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Concepts in Taxation

Mr. Rohan Mehta, a resident individual, has the following income for the year: salary income after standard deduction Rs 9,00,000, rental income from house property Rs 2,00,000, and a loss of Rs 3,50,000 from a second let-out house property. Assume the set-off is permitted without any cap and ignore all other items. What is his gross total income?

His gross total income is Rs 7,50,000. The two house properties net to a loss of Rs 1,50,000 (2,00,000 less 3,50,000), which is set off against salary of Rs 9,00,000, giving 7,50,000 under the stated assumption of unrestricted set-off.

  1. ARs 7,50,000Correct
  2. BRs 9,00,000
  3. CRs 8,50,000
  4. DRs 11,00,000

Explanation

Income from house property = 2,00,000 − 3,50,000 = −1,50,000, a net loss. Setting this off against salary gives 9,00,000 − 1,50,000 = 7,50,000. Rs 11,00,000 ignores the loss, and Rs 9,00,000 ignores both property items. Rs 8,50,000 deducts only the loss of Rs 50,000 mistakenly.

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