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Unit 8: Income from House Property

Notes
Example: Mr. X is the owner of four houses. The following particulars are available:

Particulars House 1 House 2 House 3 House 4
Municipal valuation 16,000 20,000 24,000 5,600
Rent (Actual) - 14,000 20,000 6,800
Municipal taxes 400 1,000 1,200 300
Repairs and collection charges 200 2,500 1,040 460

Interest on mortgage — — — 1,000
Ground rent — 100 — 60
Fire premium 140 — 200 —

Annual charges — — 360 —
House No. 1 is self-occupied.
House No. 2 is let out for business; construction was completed on 1.3.90 and consists of two
residential units.
House No. 3 is 3/4 used for own business 1/4 let out to the manager of the business.
House No. 4 is let out for residential purposes.
His other income is ` 30,000. Find out the income of X from house property for the assessment
year 2013–14
Solution:
House No. 1
Municipal valuation 16,000

Annual value deemed to be NIL
House No. 2
Fair rental value 20,000

Less: Municipal taxes 1,000
Net annual value 19,000
Less: 30% of Net Annual Value 5,700
13,300
House No. 3

Since the house is used for own business, the income from this house is not taxable under the
head ‘Income from house property’ but will be assessed under ‘Profit and gains of business or
profession’. 1/4 of the house occupied by the Manager is presumed to be incidental to the
business and hence not assessable under the head ‘Income from house property’.

House No. 4
Rent Received 6,800
Less: Municipal taxes 300

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