NTA UGC NET - Commerce Unit 10 Income-tax and Corporate Tax Planning (Part 04)

 

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NTA UGC NET - Commerce

Unit 10

Income-tax and Corporate Tax Planning

(Part 04)

 

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Calculate Gross ARV from the following details
MRV 1,70,000
FRV 1,72,000
Actual Rent 1,75,000
SRV 1,60,000
 

a. 1,75,000
b. 1,72,000
c. 1,54,600
d. 1,60,000

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Income from house property is the second head of income
 

Rent received from building is taxable under this head
 

It also include valuation of self-occupied house property
 

 

Computation of income from house property:

Determination of Annual Value
1. Actual Rent – Rent actually received
2. Real Rental Value (RRV)
3. Municipal Rental Value (MRV) - Local Authority
4. Fair Rental Value (FRV)
5. Standard Rental Value (SRV) -Rent Control Act
6. Expected Rental Value (ERV)

MRV with FRV => Higher
Higher with SRV => Lower
Lower Is the ERV
ERV with Actual Rent => Higher
Higher = Annual Value
From ARV deduct proportionate actual rent for the period of vacancy
 

ANSWER:
MRV 1,70,000 with FRV 1,72,000
Higher – 1,72,000 with SRV = 1,60,000
Lower – 1,60,000 (ERV) with Actual Rent = 1,75,000
Higher = 1,75,000 = Gross annual value
 

 

Loss from House Property
 

If the total of permissible deductions exceeds the annual rental value, there will be loss from House property
 

Loss from house property can be set off against income from another house property
 

The Loss from House Property is allowed to be set-off against any other Income arising during the same year.
 

It should be noted while setting off the Loss under head House Property in the same year, it can be set-off with any other head of income but in case the loss is being carried forward to the next assessment year, it can only be set-off against incomes arising under the same head i.e. Income from House Property only.

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