ILLUSTRATION FOR SELF OCCUPIED PROPERTY

SITUATION:-

THE HOUSE PROPERTY IS SELF OCCUPIED FOR A PART OF THE YEAR AND LET OUT FOR REMAINING PART OF THE YEAR.

Mr. D has a House Property in Bangalore, details of which are as follows:

(Rs. in Thousands)

Particulars	Amount (Rs.)
Municipal Value (1)	210
Fair Rent (2)	190
Standard Rent under the Rent Control Act (3)	200
Municipal Taxes paid	30
Interest on Borrowed Capital*	25
House was let out till 31st December-2007, monthly rent being**	24
Actual Rent Received***	216

* The loan has been borrowed for the Construction of the House property after 1st April' 1999 and it includes only Post construction period interest.
**The house after being vacated by the Tenant was Self Occupied by Mr. D till 31st March-2008.
***No Unrealized Rent during the Year

SOLUTION:-

As per the provisions of the Income tax Act' 1961, even if the house property is let out for One Single day in the Previous Year such house property is deemed to be let out for the whole Previous Year.
This is the situation which has aroused here in which case computation of income from House Property will be done as explained below:

COMPUTATION OF INCOME FROM HOUSE PROPERTY

(Rs. in Thousands)

Particulars	Amount (Rs.)
Gross Annual Value (Note-1)	216
Less: Municipal Taxes paid	30
NET ANNUAL VALUE (NAV)	186
Less: Deductions under Section 24 Sec 24(a) Standard Deduction @ 30% of NAV Sec 24(b) Interest on Borrowed Capital	55.8 25
INCOME FROM HOUSE PROPERTY	105.2

NOTES:

Note-1

Particulars	Rs.
Computation I: Reasonable Expected Rent, i.e., (1) or (2) whichever is higher subject to limit of (3)	200
Computation II: Actual Rent Received	216
Computation III: Not Applicable since there is no loss on account of Vacancy (Property was Self occupied during the rest part of the year and was not lying vacant	NA
Gross Annual Value (Higher of Computation I or II)	216