PRACTICE QUESTIONS ON INCOME FROM HOUSE PROPERTY

Transcription

1 PRACTICE QUESTIONS ON INCOME FROM HOUSE PROPERTY S No Question 1 Under what circumstances will the lessee of a property will be deemed to be the owner of the property. (a) If he acquires the property under lease for a period of 99 years (b) If he acquires the property under lease for a period of more than 50 years (c) If he acquires the property under lease for a period of more than 12 years (d) If he acquires the property under lease for a period of more than 24 years (e) Under no circumstances 2 Mr X took a housing loan from a nationalized bank on for carrying out repairs to his self occupied property and the repairs were carried out within one year from the date of loan. He also got a certificate from the bank to the effect that the interest payable on such loan was Rs.1,80,000. How much interest is allowable under sec. 24(b) in computing income from house property for the AY if the property is SOP? (a) Rs.1,00,000 (b) Rs.1,50,000 (c) Rs. 30,000 (d) Rs.1,80,000 3 Mr A borrowed Rs.20 lakhs from HDFC 11% on for construction of his property at Perambur, Chennai. The construction of the property, however was completed only on The property being used for self occupation, what is the quantum of interest eligible for deduction for the AY u/s 24(b) exclusive of pre construction interest? (a) Rs. 30,000 (b) Rs.2,20,000 (c) Rs.1,50,000 (d) Rs.1,00,000 4 Mr B, a landlord was unable to realize rent of Rs.1,50,000 from a tenant relatable to AY However, subsequently, he was successful in collecting Rs.1,00,000 from that tenant during PY How much is chargeable to tax? (a) Rs.1,00,000 for AY (b) Rs. 1,50,000 for AY (c) Rs. 70,000 for AY (d) Rs.1,00,000 for AY Mr C has two house properties one at Chennai, one at T Nagar and the other at Nungambakkam, both of which are occupied for own residential purposes. (a) Mr C can treat both houses as self occupied (b) One house can be treated as self occupied as determined by the AO (c) Since more than one house are under owner occupation, neither house can be treated as self occupied (d) One house can be treated as self occupied at the option of the assessee 6 A house at Chennai is jointly owned by three persons, namely X Y and Z. The respective shares of the owners is not definite / ascertainable. The house is let out during the PY (a) X Y & Z are each assessable in respect of 1/3 rd of annual value of the property (b) Annual value of the property is not assessable to tax as the shares are not definite (c) The annual value is to be taxed as AOP in the absence of definite shares of co owners (d) At the option of the AO, the income may be taxed in co-owners hands or as AOP 7 Mr ABC owned a property at Madurai which was let out. The said property was sold by the

2 assessee on During PY , Mr ABC received a sum of Rs.2,00,000 being arrears of rent received from ex-tenant relatable to PY (a) Since the assessee is no longer owner of the property, the arrears are not taxable in his hands (b) The entire arrears of Rs is taxable for AY (c) Rs.1,40,000 alone is taxable for AY (d) Rs.1,40,000 alone is taxable for AY Mr XYZ owns a house property at Salem, in respect of which he paid municipal taxes of Rs.1,30,000 during the PY Out of this, Rs.40,000 pertained to PY & Rs pertained to PY (a) The sum of Rs.40,000 is deductible for AY & Rs.25,000 for AY & balance for AY (b) Rs.1,30,000 is deductible for AY (c) No deduction is permissible on municipal taxes pertaining to earlier years & only the balance of Rs.65,000 is deductible for AY (d) No deduction is permissible for municipal taxes under the IT Act 9 Shyam, who is a software professional employed with TCS, owns a property at Chennai. However on he was transferred to Mumbai and therefore had to keep the house locked. (a) Any way, the notional annual value has to be offered to tax (b) The property to be treated as SOP and annual value would be nil (c) The same annual value, as offered in the earlier AY, is to be assessed (d) Since the house was not let out, only 50% of notional annual value would be assessable 10 Ms Geetha owns a property at Coimbatore. During PY , she let out the property from to Thereafter, she occupied the house for own residential purposes. For the AY , (a) Nothing is taxable due to self occupation for part of the year availing benefit u/s 23(2) (b) Annual value is assessable as if the property is let out (c) SOP benefit to be granted for period of self occupation and annual value for period from to is to be computed separately and taxable. (d) None of the above 11 Mr D, a resident, owns a house property in Malaysia which has been let out through out the PY (a) Sec. 22 of the IT Act is not applicable to properties outside India and hence annual value of Malaysia property is not taxable. (b) Annual value of the property is taxable in the hands of Mr.D in India (c) Annual value of the property is taxable in the hands of Mr.D in Malaysia (d) None of the above. 12 Mr A who had taken a property on monthly rent of Rs.10,000 from Mr B, sub-let a portion of the property to C for a monthly rent of Rs.3000/-. In the hands of Mr A, the rentals received from C (a) Is not taxable at all, since he is not the owner (b) Taxable as income from house property (c) Taxable as income from other sources (d) Taxable as business profits 13 Mr X, an individual, owns a house property at Chennai. On , he transferred his property to his wife without any consideration. Mrs X receives rental income of Rs.15,000 p.m. after from letting out of the property.

3 (a) Annual value of property is taxable in the hands of Mr X (b) Annual value of property is taxable in the hands of Mrs X (c) 50% of Annual value of property is taxable in the hands of Mr X and the balance 50% in the hands of Mrs X (d) None of the above 14 Mr Kumar a member of co-op housing society, was allotted a flat at Mumbai, under the house building scheme of the society. For the purposes of the IT Act, (a) Mr Kumar will be the owner upon payment of last instalment (b) Co-op Housing society will be the owner at all times (c) Mr Kumar will be the owner immediately upon allotment (d) There is a joint ownership of the property between Mr Kumar and the Co-op. housing society 15 Mr X took a loan of Rs.6 lakhs from a 10% p.a. for construction of house on The construction of the house was completed on 1/10/2010. The entire loan is outstanding. What is the quantum of pre-construction interest allowable for AY ? (a) Rs.24,000 per year for 5 years (b) Rs.30,000 per year for 5 years (c) Rs.40,000 per year for 3 years (d) Rs.50,000 per year for 3 years 16 The quantum of deduction u/s 24(a) is (a) 1/3 rd of Net Annual Value (b) 33-1/3 % of Net annual value (c) 30% of Net Annual value (d) 30% of Gross Annual value 17 Mr A, a landlord, had let out his property in Trichy. He incurs expenses on watchman s Rs.5000 p.m. in respect of let out property and wants to claim deduction for the same from his rental income. (a) Expenses are fully allowable as it is incurred wholly and exclusively for earning rentals (b) 50% of the expenditure is allowable (c) Since the property is let out, only the tenant is eligible to claim the above expenses (d) The expenditure is not allowable 18 M/s ABC Ltd., a real estate company took a housing project at OMR Road. Out of 180 flats completed, the company was able to sell only 150 flats. The company let out the remaining 30 flats remaining as its stock, till it is able to find a buyer for those flats. The rental income from those flats during the PY was Rs. 12,00,000. (a) The income from letting out of such flats is assessable as Income from house property (b) The income from letting out of flats forming stock, is assessable as business profits (c) The income from letting out of such flats is assessable as Income from Other sources (d) The receipt is capital in nature and hence not to be taxed at all 19 In respect of my property at Bombay, Municipal Value -Rs.90,000 ; Fair Rent-Rs.1,40,000; Standard Rent-Rs.1,20,000 ; Actual Rent-Rs.12,000 pm and Municipal Taxes paid -Rs.40,000. My annual value is (a) Rs.50,000 (b) Rs.1,00,000 (c) Rs.1,04,000 (d) Rs.80, Pl compute the annual value in respect of the following property for the AY

4 Municipal Value of the house Rs. 90,000 ; Fair Rent Rs.1,40,000; Standard Rent Rs.1,20,000 HP let out for Rs.12,000/- p.m. and was Vacant for one month during PY Municipal tax paid Rs.40,000 (a) Rs.1,32,000 (b) Rs. 50,000 (c) Rs. 92,000 (d) Rs.1,00, X TAXES A LOAN OF Rs.6,00,000/- from a bank at 10% p.a.for constructing a house on Construction of the house got completed on and let out thereafter. The entire loan is still outstanding. Compute interest allowable for the AY (a) Rs. 84,000 (b) Rs. 72,000 (c) Rs.1,00,000 (d) Rs. 40, Ram has a house property in Chennai whose Municipal Value is Rs.1,00,000 and Fair Rental Value is Rs.1,20,000/-. It was self-occupied by Ram from to W.e.f , the property was let out for Rs.9,000/- p.m. Compute the annual value if the municipal taxes paid during the year were Rs.20,000. (a) Rs.1,00,000 (b) Rs. 52,000 (c) Rs. 80,000 (d) None of the above. 23 X owns a property which is used by him thro out the PY for his residence. Municipal Valuation is Rs.1,66,000, whereas Fair Rental Value is Rs.1,76,000 and the Standard Rent is Rs.1,50,000. Expenses incurred by X Repairs Rs.20000; municipal tax Rs.16,000; insurance Rs.2,000; int on capital borrowed to construct property Rs.1,36,000/-; int on borrowals by mortgaging property for daughter s marriage Rs.20,000(both loans taken before ) Income of X from business is Rs.7,00,000 Compute the total income of X for the AY (a) Rs.6,70,000 (b) Rs.5,64,000 (c) Rs.5,44,000 (d) Rs.7,14,000

5 Q No Ans Remarks 1 c Deemed owner u/s 27 2 c Interest upto Rs is allowable only on loan taken for purchase/construction. For loans taken for repair, renovation etc. only Rs.30,000 is available for SOP 3 c Since it is SOP, maximum interest allowable will be Rs.1,50,000 4 d Unrealised rent is taxable without any deduction in the AY relating to receipt 5 d 6 c Sec 26 of the Act 7 d Arrears of rent received is taxable in the year of receipt after 30% deduction 8 b 9 b 10 b 11 b In respect of resident assessee, global income is taxable. 12 c 13 a Husband will be deemed owner as per sec c Refer sec a Pre-construction period means the period commencing on the date of borrowal and ending on March 31 immediately preceding the date of completion of constn. or the date of repayment of the loan whichever is earlier. Therefore, interest from to which works to Rs is deductible over 5 years i.e. Rs for 5 years 16 c 17 d List of deductions u/s 24 are exhaustive and no other deduction is permissible 18 a Even though the flats form the stock of the assessee, since there is a specific head of income, the annual value is taxable as Income from House property only 19 c 20 c 21 a Preconstruction interest Rs current year interest Rs.60, b 23 a Since SOP income from house property is (-) Rs.30,000( loan taken before ). This set off against business profits of Rs.7,00,000, the total income is Rs.6,70,000