v.
X owns a residential house property. It has two equal residential units- Unit-1 and
Unit-2. While Unit 1 is self-occupied by X for his residential purpose, Unit-2 is let
out (rent being Rs. 6.000 per month where rent of two months could not be
recovered). Municipal value of the property is Rs. 130,000, standard rent is Rs.
125,000 and fair rent is Rs. 140,000. Municipal tax is imposed @ 12 per cent which is
paid by X. Other expenses for the previous year 2019-20: Rs. 250 as repairs,
Insurance Rs. 600, interest on capital (borrowed in 1997) for constructing the
property Rs 63,000. Find the income of X for the assessment year 2020-21 on the
assumption that income of X from other sources is Rs. 180,000.
(15)
Answers
Answer :
The income of X for the assessment year 2020-21 on the assumption that the income of X from other sources is Rs. 180,000 is Rs. 94,900.
Explanation :
The income of X for the assessment year 2020-21 on the assumption that the income of X from other sources is Rs. 180,000 can be calculated using the following formula:
Income from House Property = (Rental Income + Income from Self-Occupied Unit) - (Allowable Deductions)
Rental Income = Rs. 6,000 (per month) x 12 (months) = Rs. 72,000
Income from Self-Occupied Unit = (Standard Rent - Municipal Value) x 30% = (125,000 - 130,000) x 30% = -5,000 x 30% = -1,500
Allowable Deductions = Municipal Taxes + Repairs + Insurance + Interest on Capital = 12% x 130,000 + 250 + 600 + 63,000 = 156,600
Income from House Property = (72,000 + -1,500) - 156,600 = -85,100
Total Income = Income from House Property + Income from other sources = -85,100 + 180,000 = 94,900
So the income of X for the assessment year 2020-21 on the assumption that the income of X from other sources is Rs. 180,000 is Rs. 94,900.
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