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Richa’s Gross Annual Value is reported as ______ Rs.
4800
Richa calculated her Annual Value as ______ Rs.
4400
The standard deduction applied to Richa’s income is ______ Rs.
1320
Richa’s total income from the house property is ______ Rs.
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Aliya's rent realized for her property is ______ Rs.
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Aliya provided amenities worth ______ Rs. to the tenant.
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The Gross Annual Value calculated after deducting tenant amenities for Aliya is ______ Rs.
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Aliya’s taxable income from house property amounts to ______ Rs.
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Net Annual Value is calculated as (GAV – Municipal Tax – ______)
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The formula for calculating Net Annual Value includes Gross Annual Value (GAV) less ______ taxes paid.
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To calculate income from house property, one must consider deductions under section 24(a) which is @ ______% of NAV.
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If a house is occupied for the full year by the owner, the annual value of the house is ______.
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When part of the house is let out while the owner occupies the other part, the annual value will be determined by deducting the proportionate annual value for the ______ part.
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In the example given, the Gross Annual Value (GAV) was Rs. ______,000.
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The income from house property after deductions was calculated to be Rs. ______,000.
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Deductions under section 24(b) refer to the amount paid on ______ which can be deducted from the income from house property.
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House property includes residential properties, commercial properties, and ______ land.
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The annual value of a property is assessed to tax only in the hands of the ______.
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Income from sub-letting is not taxable under income from house property but under ‘Income from ______ sources’.
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A legal owner has the legal ______ of the property as per the relevant property acts.
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For income tax purposes, if the assessee enjoys the property as an owner, they will be treated as a ______ owner.
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If an individual transfers a house property to their spouse without adequate ______, they are considered the deemed owner.
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The Income Tax Act does not differentiate between commercial and ______ property.
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A self-occupied house property is used for ______ purposes.
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Study Notes
Net Annual Value (NAV)
- NAV is calculated by subtracting municipal tax and unrealized rent from Gross annual value (GAV)
- Example: GAV = Rs. 2,50,000, Municipal Tax= Rs. 20,000, Unrealized rent = Rs. 40,000, therefore NAV = Rs. 1,90,000
Income from House Property
- Calculation involves subtracting deductions from NAV.
- Deductions include 30% of NAV under section 24(a) and interest paid under section 24(b).
Example Calculation
- Gross Annual Value (GAV) = Rs. 5,00,000
- Municipal Taxes = Rs. 20,000
- Interest on loan = Rs. 1,00,000
- NAV = Rs. 4,80,000
- Deduction under section 24(a) = Rs. 1,44,000
- Deduction under section 24(b) = Rs. 1,00,000
- Total Deduction = Rs. 2,44,000
- Income from House Property = Rs. 2,36,000
Self-Occupied House
- Owner can occupy the house for full year, part of the year, or a part of the house for the full year.
- If the house is self-occupied for full year, the annual value of the house is nil.
- If a part of the house is let out for full year, the annual value of the let out part is calculated by deducting the proportionate annual value for the self-occupied part from the full house annual value.
Example: Richa’s income from house property
- GAV = Rs. 4,800
- Municipal Tax = Rs. 400
- Annual Value = Rs. 4,400
- Standard Deduction (30% of AV) = Rs. 1,320
- Interest on loan = Rs. 200
- Income from House Property = Rs. 2,880
Example: Aliya’s income from house property
- Rent realized = Rs. 90,000
- Tenant amenities provided by landlord (water, lift, lighting, gardener) = Rs. 4,000
- GAV = Rs. 86,000
- Municipal Tax = Rs. 0 (tenant pays)
- Annual Value = Rs. 86,000
- Standard Deduction = Rs. 25,800
- Taxable Income from house property = Rs. 60,200
Income from house property
- House property refers to any building or land attached to a building that is owned by an individual for income generation.
- Includes residential, commercial properties and vacant land that earns income.
- The owner is taxed on the annual value of the property irrespective of receiving actual income.
- Income from subletting is considered income from other sources, not income from house property.
Legal, Beneficial, and Deemed Owners
- Legal owners are those with legal title to the property.
- Beneficial owners enjoy the property to full extent and are taxed as owners.
- Deemed owners are deemed to own the property even if they have transferred it to their spouse or minor child without adequate consideration.
- Example: Mr. X transfers his house to Mrs. X, Mr. X is deemed the owner for tax purposes.
Basics of House Property Tax
- Tax applies to both commercial and residential properties.
- Owner is defined as the legal owner who exercises ownership rights.
- Properties are classified into self-occupied and let-out properties for tax purposes.
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Description
This quiz covers the calculations involved in determining the Net Annual Value (NAV) and income from house property according to tax laws. It includes examples and key deductions relevant to self-occupied houses and gross annual value adjustments. Test your understanding of these property income principles!
