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CA Intermediate · Taxation · Income from House Property

Mr. Sameer Joshi let out his Pune flat for the whole of tax year 2026-27 at monthly rent Rs 40,000. GAV is thus Rs 4,80,000. No municipal taxes were paid. He paid interest of Rs 1,20,000 on a loan for the flat. What is his income from house property?

Income from house property is Rs 2,16,000. NAV equals GAV of Rs 4,80,000, from which the 30% standard deduction of Rs 1,44,000 and interest of Rs 1,20,000 are deducted. The standard deduction is computed on NAV before interest.

  1. ARs 2,16,000Correct
  2. BRs 2,40,000
  3. CRs 2,64,000
  4. DRs 3,60,000

Explanation

NAV = 4,80,000 (no municipal tax). Standard deduction 30% = 1,44,000. Interest = 1,20,000. Income = 4,80,000 - 1,44,000 - 1,20,000 = 2,16,000. Option 3,36,000-type errors arise from deducting interest before the 30% deduction; that gives 4,80,000-1,20,000=3,60,000 less 30% of 3,60,000 = 2,52,000, which is wrong.

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