2 – HOUSE PROPERTY

Problems on INCOME FROM HOUSE PROPERTY

KYC-Know Your Concepts

1. Loan taken on 15thJune 2018 for purchase of House Property. Interest on the Loan for the year is
₹2,18,000
a. House Property is Self-Occupied then allowable Interest is=

b. House Property is Let Out then allowable Interest is=

c. House Property is Deemed Let Out then allowable Interest is=

d. If loan is for repairs and house property is self-occupied, then allowable Interest =

e. If loan is taken on 15thJune 1998 and house property is self-occupied then allowable Interest=

2. X recovered unrealized rent of PY 18-19 of ₹ 80,000 on 21stMay 2024. X incurred expenses of ₹ 12,000
on recovery. The realized rent income of ₹ taxable under the head ________ in
AY__________________________

3. Arrears of rent receivable from ABC Ltd of ₹18,000 relating to last year received in December 2024.
Income taxable ₹ _____________ under head __________ in AY ______________

4. If municipal taxes paid by tenant, then whether it will be allowable or not.

5. GAV of DLO property=

6. GAV of LO property=
7. GAV OF LO Property=
8. L O Property if it is vacant for 12 m then its GAV =

CA POOJA DATTE Swapnil Patni Classes 17

 2 – HOUSE PROPERTY

When house is self-occupied for a part of the year and let out for the remaining part.

1. X owns a property at Delhi (Municipal Value Rs 164000, fair rent Rs 216000, standard Rent Rs 180000)
The house is let out up to 31stJan 2025 monthly rent being Rs 14000. From Feb 1st2025 the property is self-
occupied for own residential purposes. The expenses incurred by X are Municipal tax Rs 6000 (actually paid)
repairs Rs 2100. Insurance Rs 1100 and interest on capital borrowed (date of borrowing being June 10 1996
for acquiring the property Rs 123000) Assuming that the income of X from other sources is 186000. Find out
the tax liability of X for the A Y 2025-26.

When- part of the property is self-occupied and a part is let out.

2. Mr. X owns one residential house property in Mumbai. The house is having two identical units. First unit of
the house is self-occupied by Mr. X and another unit is rented for 8,000 p.m. The rented unit was vacant for
2 months during the year. The particulars of the house for PY 24-25 are as under:
Standard Rent: 1,62, 000p.a, Municipal Valuation: 1,90 ,000 p.a Fair rent: 1,85,000 p.a
Municipal tax (paid by Mr. X): 15% of municipal valuation. Light and water charges: 500 pm
Interest on borrowed capital: 1500 pm; Lease money: 1200 p.a. Insurance charges: 3000 p.a.
Repairs: 12,000 p.a
Compute income from house property for Mr. X for the A.Y. 2025-26. If he exercises the option of shifting
out of the default tax regime provided under section 115BAC(1A). (Module Question)

3. Ganesh has a property whose municipal valuation is ₹2,50,000 p.a. The fair rent is ₹2,00,000p.a. and the
standard rent fixed by the Rent Control Act is ₹2,10,000 p.a. The property was let out for a rent of ₹20,000
p.m. However, the tenant vacated the property on 31.1.2025. Unrealized rent was ₹20,000 and all conditions
prescribed by Rule 4 are satisfied. He paid municipal taxes @8% of municipal valuation. Interest on borrowed
capital was ₹65,000 for the year. Compute the income from house property of Ganesh for A.Y.2025-26
(Module question) (HW)

CA POOJA DATTE Swapnil Patni Classes 18

 2 – HOUSE PROPERTY

4. Anirudh has a property whose municipal valuation is ₹1,30,000 p.a. The fair rent is ₹1,10,000 p.a. and the
standard rend fixed by the Rent Contract Act is ₹1,20,000 p.a. The property was let out for a rent of ₹11,000
p.m. throughout the previous year. Unrealised rent was ₹11,000 and all conditions prescribed by Rule 4 are
satisfied. He paid municipal taxes @ 10% of municipal valuation. Interest on borrowed capital was ₹40,000
for the year. Compute his income from house property for A. Y. 2025-26. (Module question) (HW)

5. Smt. Rajalakshmi owns a house property at Adyar in Chennai. The municipal value of the property is
₹5,00,000 fair rent is ₹4,20,000 and standard rent is ₹4.80,000. The property was let-out for ₹50,000 p.m.
up to December 2024. Thereafter, the tenant vacated the property and Smt. Rajalakshmi used the house for
self-occupation. Rent for the month of November and December 2024 could not be realized in spite of the
owner’s efforts. All the conditions prescribed under Rule 4 are satisfied. She paid municipal taxes @ 12%
during the year. She had paid interest of ₹25,000 during the year for amount borrowed for repairs for the
house property. Compute her income from house property for the A.Y.2025-26. (Module question) (HW)

6. Anand Sir, a British national, is a resident and ordinarily resident in India during the P.Y 2024-25. He owns a
house in London, which he has let out at £ 10,000 p.m. The municipal taxes paid to the Municipal Corporation
of London are £ 8,000 during the P.Y2024-25 The value of one £ in Indian rupee is to be taken at ₹95.00.
Compute Anand sir’s Income from HP of the property for the A.Y. 2025-26 (Module question)

7. Prem owns a house in Madras. During the previous year 2024-25, 2/3rdportion of the house was self-
occupied and 1/3rdportion was let out for residential purposes at a rent of ₹8,000 p.m. Municipal value of
the property is ₹3,00,000 p.a. fair rent is ₹2,70,000 p.a. and standard rent is ₹330000. He paid municipal
taxes @ 10% of municipal value during the year. A loan of ₹25,00,000 was taken by him during the year 2021
for acquiring the property. Interest on loan paid during the previous year 2023-24 was ₹1,20,000. Compute
Prem’s income from house property for the A. Y. 2025-26. (Module question3.162 illustration 9) (HW)

CA POOJA DATTE Swapnil Patni Classes 19

 2 – HOUSE PROPERTY

Interest on borrowed capital

th
8. X takes a loan of Rs 40000 @ 15% p.a. for constructing a house property on 10 June 2017. Construction
of the house is completed on 20thJanuary 2023. Date of repayment of loan is
a. 16thJan 2027 b) 30thJune 2024

9. Arvind had taken loan of ₹5,00,000 for construction of property on 1.10.2022. Interest was payable @
13% p.a. The construction was completed on 30.06.2023. No principal repayment has been made up
to 31.3.2025. Compute the interest allowable as deduction u/s 24 for the A.Y.2025-26.

10. Mrs. Rohini Ravi, a citizen of the U.S.A., is resident and ordinary resident in India during the financial
year 2024-25. She owns a house property at Los Angeles, U.S.A., which is used as her residence. The
annual value of the house is $ 20,000. Value of one USD ($) may be taken as ₹75 She took ownership
and possession of a flat in
Chennai on 1.07.2024, which is used for self-occupation, while she is in India. The flat was used by her
for 7 months only during the year ended 31.03.2025. The municipal valuation is ₹ 3,84,000 p.a and the
fair rent is ₹ 4,20,000 p.a. she paid the following to corporation of Chennai; property tax ₹ 16200 and
sewerage tax 1800.She had taken a loan from Standard Chartered Bank in June 2022 for purchasing
this flat Interest on loan was as under:

Particulars Rs.
Period prior to 1.4.2024 49,200
1.4.2024 to 30.6.2024 50,800
1.7.2024 to 31.3.2025 1,31,300
She had a house property in Bangalore, which was sold in March, 2021. In respect of this house, she received
arrears of rent of ₹ 60,000 in March 2025. This amount has not been charged to tax earlier. Compute the
income chargeable from house property of Mrs. Rohini Ravi for the A.Y. 2025-26 if she has exercised the
option of shifting out of the default tax regime provided under section 115BAC(1A)
Would your answer change if she pays tax under the default tax regime under section 115BAC? (module
question)

11. Arvind commenced construction of a residential house intended exclusively for his residence, on 1.11.2022.
He raised a loan of ₹10,00,000 at 16% interest for the purpose of construction on 1.11.2022. Finding that
there was an over-run in the cost of construction he raised a further loan of ₹8,00,000 at the same rate of
interest on 1.10.2024. What is the interest allowable u/s.24, assuming that the construction was completed
31.03.2025 (May 2000)?

CA POOJA DATTE Swapnil Patni Classes 20

 2 – HOUSE PROPERTY

12. Poorna has one house property at Indira Nagar in Banglore. She stays with her family in the house. The
rent of similar property in the neighborhood is ₹ 25,000 p. m. The municipal valuation is ₹ 2,80,000 p. a.
Municipal taxes paid is ₹ 8,000. The house construction is beginning in April 2018. With a loan of ₹ 20,00,000
taken from SBI Housing Finance Ltd. @9% p.a. on 1.4.2018. The construction was completed on 30.11.2020.
The accumulated interest upto 31.3.2020 is ₹ 3,60,000. On 31.3.2025, Poorna paid ₹ 2,40,000 which included
₹ 1,80,000 as interest. There was no principal repayment prior to this date. Compute Poorna’s income from
house property for A.Y. 2025-26 assuming that she has exercised the option of shifting out of the default tax
regime provided under section 115BAC(1A) (Module question) (HW)

13. Mr. X, (36 years) has occupied three houses for his residential purposes, provides following
information: Salary ₹264000 p.a. (Computed) and per month particulars of houses:
Particulars House I House II House III
I
Municipal value (a) 40000 60000 40000
Fair rent (b) 43000 58000 48000
Standard rent (c) as per Poona Rent Control Act 33000 55000 40000
Municipal taxes paid 3000 6000 4000
Repairs -- -- --
Insurance premium due but outstanding 300 400 500
X borrows from a relative ₹10,000 @ 12% per annum for construction of house II (date of borrowing June
1, 2019, date of repayment of loan May 31, 2024) construction of all the Houses is completed in August
2021.
Determine taxable income and tax liability of Mr. X for the AY 2025-26 subject to he contributes ₹10000
towards statutory provident fund and ₹2000 towards National Relief Bonds.

CA POOJA DATTE Swapnil Patni Classes 21

 2 – HOUSE PROPERTY

14. Mr. X (50 years) submits following information for assessment year 2025-26 He owns a big house (erection
completed on March 1, 2018) having 3 independent residential units.
Particulars Unit I Unit II Unit III
Floor area occupied 50% 25% 25%
Let out at monthly rent 8000 -- --

X uses Unit I from January 15, 2025 to March 15, 2025 and a sum of ₹1000 could not be collected from the
tenant for the same unit.
X uses Unit II for the purpose of his residence.
X uses Unit III for the purpose of his business.
Municipal valuation ₹192,000. Insurance premium ₹6,000 Municipal taxes (paid) ₹16,000. Land revenue
₹1800.
Repairs ₹4000. Interest on capital borrowed for payment of municipal tax ₹4000. Income of X from business
is ₹161200 (without debiting House rent and other incidental expenditure including admissible depreciation
of ₹600 on the one fourth portion of house used for business).
Determine taxable income and tax liability of Mr. X for the Assessment year 2025-26 subject to he
contributes ₹8000 towards Home Loan Account of the National Housing Bank. Contributes 13000 in ULIP &
2000 towards Indira VikasPatra.

15. Mr. X, (36 years) has occupied three houses for his residential purposes, Compute income from House
property from the following information:
Particulars House I House II House III

Municipal value (a) 400000 600000 240000

Fair rent (b) 455000 580000 248000
Standard rent (c) as per Poona Rent Control Act 333000 550000 240000
Repairs 55000 21600 17640
Interest on borrowed capital 84600 156800 54700
Municipal taxes for all the above properties have been paid @ 12 % (HW)

CA POOJA DATTE Swapnil Patni Classes 22

 2 – HOUSE PROPERTY

16. Mrs. X (35 years) is owner of following properties;

House, I purchased on July 1, 2024 which is let out on a monthly rent of ₹2000
Construction of the house was completed on June 1, 2024. It was let out from October 1, 2023. House II
constructed in 2014 is now self-occupied (municipal valuation ₹70, 000). During 2019-20 and 2020-21, it was
let out to a public sector company (monthly rent ₹6000). The lease agreement with the public sector
undertaking expired on March 31, 2023, but the house was vacated on January 31, 2024. For April 1, 2023
to January 31, 2024 arrears of rent of ₹24,000 is paid to X on June 30, 2024 (it was not taxed earlier, litigation
expenses ₹2000). Expenses incurred during the year against rental income are
Particulars House I (Rs) House II (Rs)
Municipal taxes during the previous year ending 2000 6000
on March 31,2025
Water charges -- 1200
Fire insurance premium 600 2300
Collection charges 750 --
House II, if let out, would fetch a monthly rent of ₹4,000. However, standard rent of the flat under the Rent
Control Act is ₹3, 000 per month.
Municipal valuation and fair rent of House I is ₹10,000 (annual) and ₹12,000 (annual) respectively. There is
no unrealized rent for the previous year 2024-25.
Mrs. X carries a business in which she suffered a loss per of ₹500. Mrs. X receives a consolidated salary of
₹60, 000 per month.
Mrs. X purchases bonds of NABARD of Rs 20000 on 31.3.2025 and National Saving Certificates (VIII/Issue) of
₹1, 55,000 on April 4, 2025.
Determine the taxable income of Mrs. X for the assessment year 2025-26.

17. X (28 years) is owner of a house property in Madras (which is let out for ₹72, 000 including ₹8,400
for maintenance of lift and garden) Municipal valuation ₹60,000; Fair rent ₹62,000; Standard rent ₹61,600;
Rent of half month could not be collected (1/24 of ₹72,000) ₹3,000.
Local taxes payable by the owner amounts to ₹6, 000 but the tenant has undertaken to pay the same, tenant
also bears cost of repairs. However, X bears the following expenditure during the previous year 24-25
Insurance of house ₹2900; Lift maintenance ₹7600; salary of gardener ₹1100; Interest on borrowed capital
₹1305. His business income is ₹3,46,000. Determine taxable income and tax liability of Mr. X for the
A.Y.2025-26 The construction of the house was completed on March 31, 2017. X contributes ₹60, 000
towards National Saving Certificate, VIII issue on April 1,2024.

CA POOJA DATTE Swapnil Patni Classes 23

 2 – HOUSE PROPERTY

18. Ganesh has three houses, all of which are self-occupied. The particulars of the houses for the P.Y. 2024-25
are as under: (Module question)
Particulars House I House II House III
Municipal valuation p.a. ₹ 3,00,000 ₹ 3,60,000 ₹ 3,30,000
Fair rent p.a. ₹ 3,75,000 ₹ 2,75,000 ₹ 3,80,000
Standard rent p.a. ₹ 3,50,000 ₹ 3,70,000 ₹ 3,75,000
Date of completion /purchase 31.3.2000 31.3.2002 01.04.2016
Municipal taxes paid during the year 12% 8% 6%
Interest on money borrowed for repair of property - 55,000 -
during the current year
Interest for current year on money borrowed in 1,75,000
April 2017 for purchase of property
Compute Ganesh”s income from house property for A. Y.2025-26 and suggest which houses should be opted
by Ganesh to be assessed as self –occupied so that his tax liability is minimum (Module Question)

19. Mr. Manas owns 2 house properties. One at Bombay, wherein his family resides and the other at Delhi,
which is unoccupied. He lives in Chandigarh for employment purposes in a rented house. For acquisition of
house property at Bombay, he has taken a loan of 30,00,000 @ 10% pa on 1-4-2023. He has not repaid any
amount so far. In respect of House property in Delhi, he has taken a loan of 5,00,000 @ 11% pa at 1-10-2023
towards repairs. Compute the deduction which would be available to him under section 24(b) for AY 2025-
26 in respect of interest payable on such loan. (Module Question (HW)

20. Mr. Anand sold his residential house property in March 2024. In June 2024, he recovered rent of ₹ 10,000
from Mr. Gaurav to whom he had let out his house for two years from April 2018 to March 2020. He could
not realize two months’ rent of ₹ 20,000 from him and to that extent his actual rent was reduced while
computing income from house property for A. Y. 2020-21.
Further, he had let out his property from April, 2020 to February, 2024 to Mr. Satish. In April, 2022 he had
increased the rent from ₹ 12,000 to ₹ 15,000 per month and the same was a subject matter of dispute. In
September, 2024, the matter was finally settled and Mr. Anand received ₹ 69,000 as arrears of rent for the
period April 2022 to February, 2024.
Would the recovery of unrealised rent and arrears of rent be taxable in the hands of Mr. Anand, and if so in
which year? (Module Question) (HW)

CA POOJA DATTE Swapnil Patni Classes 24

 2 – HOUSE PROPERTY

21. Mr. A and B constructed their house on a piece of land purchased by them at New Delhi. The buildup area
of each house was 1,000 sq. ft. Ground Floor and an equal area in the first floor. A started construction on
1.4.2023 and completed on 31.03.2024. B started the construction on 01.04.2023 and completed the
construction on 30.06.2024. A occupied the entire house on 01.04.2024. B occupied the Ground Floor on
01.07.2024 and let out the first floor for a rent of ₹15,000/- per month. However, the tenant vacated the
house on 31.12.2024 and B occupied the entire house during the period 01.01.2025 to 31.03.2025 Following
are the other information:
Fair rental value of each unit (Ground floor/ first floor) ₹100,000
Municipal value of each unit (Ground floor / first floor) ₹72,000
Municipal taxes paid by A ₹8,000
Municipal taxes paid by B ₹8,000
Repairs & Maintenance charges paid by A: ₹28,000
Repairs & Maintenance charges paid by B: ₹30,000

A has availed a housing loan of ₹20 lakhs @ 12% p.a. on 1.04.2023. B has availed a housing loan of ₹12 lakhs
@ 10% p.a. on 1.07.2023 No repayment was made by either of them till 31.03.2024. Compute income from
house property for A and B for the previous year 2024-25 (Nov. 03)/MTP for May 2023) (HW)

CA POOJA DATTE Swapnil Patni Classes 25

 2 – HOUSE PROPERTY

Co-owners
22. Ms, Aparna co-owns an RHP in Calcutta along with her sister Ms. Dimple where her sister’s family resides.
Both of them have equal share in the property and is used by them for self-occupation. Interest is payable
in respect of loan of 50 lakhs @ 10% taken on 1-4-2023 for acquisition of such property. In addition, Ms.
Aparna owns a flat in Pune in which she and her parents reside. She has taken a loan of 3 lakhs @ 12% on
1-10-2023 for the repairs of this flat. Compute the deduction which would be available to Ms. Aparna and
Ms. Dimple u/s 24(b) for A.Y. 2025-26. if both exercise the option of shifting out of the default tax regime
provided under section 115BAC (1A) (Module Question)

23. Mr. Raman is the co-owner of the property along with his brother holding equal share in the property.
Municipal value: 1,60,000, Fair Rent: 1,50,000, Standard Rent as per the Rent Control Act 1,70,000, Rent
Received: 15,000 p.m.
The loan for construction of this property is jointly taken and interest is charged by the bank is ₹ 25,000 out
of which 21,000 has been paid. Interest on the unpaid interest is 450. To repay this loan Raman and his
brother have taken a fresh loan and interest charged on this loan Is 5,000. The municipal taxes of 5,100 have
been paid by the tenant. Compute the income from HP in the hands of Mr. Raman

24. Two brothers Arun and Bimal are co-owners of a house property with equal share. The property was
constructed during the financial year 2016-2017. The property consists of eight identical units and is situated
at Cochin.
During the financial year 2024-25, each co-owner occupied one unit for residence and the balance of six
units were let out at a rent of ₹ 12,000 per month per unit. The municipal value of the house property is ₹
9,00,000 and the municipal taxes are 20% of municipal value, which were paid during the year. The other
expenses were as follows:
Particulars Rs.
Repairs 40,000
Insurance premium (paid) 15,000
Interest payable on loan taken for construction of house 3,00,000
One of the let-out units remained vacant for four months during the year.
Arun could not occupy his unit for six months as he was transferred to Chennai. He does not own any other
house.
The other income of Mr. Arun and Mr. Bimal are ₹ 2,90,000 and ₹ 1,80,000, respectively, for the financial
year
2024-25
Compute the income under the head ‘Income from house property’ and the total income of two brothers
for the A.Y. 2025-26. If they pay tax under the default tax regime under section 115BAC.
Also, show the computation of income under this head, if they both exercised the option of shifting out of
the default tax regime provided under section 115BAC(1A) (Module question)

CA POOJA DATTE Swapnil Patni Classes 26