Worked Solution
✓ VerifiedAnswer: (A)
For the assessment year 2024-25, income from house property in the hands of Mr. Vivek is computed as follows:
Self-occupied property in Delhi: Under section 23(1), for a property occupied by the owner for personal use, the taxable income is nil. No deductions are allowed except interest on borrowed capital (none mentioned here).
Let-out property in Delhi: This property generates taxable income.
- Gross annual value (actual rent): ₹1,40,000 × 12 = ₹16,80,000
- Less: Municipal taxes (allowed under section 24(a)): ₹1,20,000
- Net annual value: ₹15,60,000
- Less: Standard deduction (30% of NAV under section 24(a)): 30% × ₹15,60,000 = ₹4,68,000
- Taxable income: ₹10,92,000
Properties gifted to spouse and minor daughter: Although section 64(1)(iii) deems income from property transferred to spouse without adequate consideration as the transferor's income, and section 64(1)(iv) clubs income from property held by minor child, these provisions relate to additional income computation. The core taxable income in Mr. Vivek's hands from properties in his name is ₹10,92,000.
Total income from house property: ₹10,92,000
Write it like this
1The skeleton
- Eliminate properties first, then compute — split the four properties into categories (self-occupied, let-out, gifted) before touching any numbers; examiners reward structured elimination over jumping straight to arithmetic.
- Self-occupied = NIL, write it and move on — state 'Annual value of self-occupied property is nil under section 23(2)' in one line; don't skip it or the examiner thinks you missed it.
- Let-out: follow the strict GAV → Municipal Tax → NAV → 30% SD ladder — deduct municipal taxes from GAV to get NAV first, then apply 30% standard deduction on NAV (not GAV); flipping this order kills your final number.
- Address clubbing explicitly, then dismiss — mention sec 64(1)(iv) for wife and sec 64(1A) for minor daughter, but note that if those properties are self-occupied by transferee, income is nil even after clubbing; this shows you know the trap and aren't ignoring it.
- State the final answer as a single line — 'Total income chargeable under the head Income from House Property in the hands of Mr. Vivek = ₹10,92,000'; MCQ answer lines that bury the figure lose the quick-scan mark.
2Examiner-rewarded phrases
3Common trap
Watch out — most students apply the 30% standard deduction on Gross Annual Value (₹16,80,000) instead of Net Annual Value (₹15,60,000 after municipal taxes). That single sequencing error drops your answer by ₹36,000 and costs you the MCQ even if your clubbing logic is perfect.