FAQ - House Property

Q. How will I calculate my income from house property where increase in the rent has been effected retrospectively.
House was let out @ Rs.50000p.m. and rent was increased from 1/7/07 to Rs.60000 and it is effective from 1/1/07. I paid municipal taxes of Rs.5000 and interest on my capital borrowed for construction of house is Rs.35000
Arrears of rent have been received during financial yr. 2007-08.

Ans. Sir, as per Sec 25B increase in the rent can be effected from back date any arrears received during current year are taxable in the year of receipt, however 30% of amount shall be deducted out of it.

Gross Annual Value : 720000
Less Municipal Taxes : -5000
Net Annual Value : 715000
Less Standard deduction : 214500
Interest on capital : 35000

Income : 465500
Add Arrears : 21000
[10000*3 = 30000
(-) 30% = 9000]

Income under head : 486500
house property


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