Wednesday, March 20, 2013

How to Compute "Income From House Property"

Friends,   Assessee has many questions regarding calculation of Income from House Property.  I mean to say what is expected rent, standard deduction, interest on borrowed capital etc.  Standard formula for calculation of income from house property is given below :-

1.  Gross annual value i.e. expected rent/actual rent received or receivable,            Rs. ___________
     whichever is higher.  However, in case of vacancy, expected rent or 
     actual rent received or receivable, whichever i lower.

2. Less:-
        (a)  The amount of rent which could not be realized                  Rs.____    
        (b)  Taxes actually paid and borne by owner to local authority  Rs.____       Rs. ___________ 
                                                      Net annual value (NAV)                              Rs. ____________

3. Less:- Deduction allowed u/s 24
       (a)  Standard deduction @ 30% of NAV                                Rs.____
       (b)  Interset on borrowed capital [Section 24(1)(vi)]                Rs.____       
                                                      Total                                                            Rs. ____________

4. Income Chargeable under the head "Income from House Property"                 Rs. ____________

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