INCOME FROM LET OUT PROPERTY

13)M has a residential property, details of which are given below

Particulars Amount
Municipal valuation 100000
Fair rent p.m 15000
Standard rent p.m 9600
Municipal taxes paid @ 20% of municipal valuation
Interest on loan for purchase of this house 20000
Rent receivable p.m 10000

The house property is vacant by the tenant on the last day of October 2009, it could
then be let out only from 1st of January 2010 at 14000 p.m rent for march 2010
could not be realized. Compute the income from house property for the assessment
year 2010-11
SOLUTION:
PARTICULARS
Amt Amt Amt
A) GROSS ANNUAL VALUE (GAV)
1.1 Reasonable Lettable Value (RLV) 180000
1)fair rent (15000 x12 ) 100000
2)municipal value 180000
3)higher of 1) and 2) 115200
4)standard rent (10000x12) 115200
Lower of 3) and 4)
1.2 Actual Rent Receivable(AR)
10000x7 70000
14000x3

42000
112000
Less: Unrealised Rent for March 14000 98000
GAV= AR, as it is less than RLV due to
vacancy
98000

B) less: municipal taxes paid by owner 20000
(20% x100000)
C)Net Annaul Value(NAV) 78000
D)Less: Deduction U/S.24
1)standard deduction(30% of nav) 23400
2)interest 20000 43400
E)INCOME FROM LET OUT PROPERTY 34600