Taxation - Income TaxQuestion 5629 of 146
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7. Mr. Sundaram owns two residential house properties in Chennai, one of which is used by him and his family for their residential purposes. Both the houses are exactly identical and their expected rent/municipal value etc. are also the same. He let out the other house for a rent of ` 1,15,000 p.m. He took two similar loans for the purchase of these two houses on 1.4.2022. The stamp duty value of these houses is ` 30 lakhs each. During the F.Y. 2023-24, he paid ` 4,00,000 as interest for each of the houses. He does not have any other income or investments during the year. He did not file his return of income within the due date under section 139(1). What shall be his total income chargeable to tax?

Options

A` 2,16,000
B` 3,66,000
C` 5,66,000
D` 1,66,000 (2 Marks)
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Correct Answer

Option C` 5,66,000

All Options:

  • A` 2,16,000
  • B` 3,66,000
  • C` 5,66,000
  • D` 1,66,000 (2 Marks)

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Detailed Solution & Explanation

Let us compute the total income of Mr. Sundaram:
1. **Tax Regime:**
- Under the provisions of the Income-tax Act, 1961, for Assessment Year 2024-25, the default tax regime is the default option under Section 115BAC.
- Even if Mr. Sundaram did not file his return of income within the due date under Section 139(1), he will be governed by the default tax regime of Section 115BAC unless he explicitly files a form to opt out, which is not mentioned here.
2. **Income from Self-occupied Property:**
- Annual Value = Nil.
- No interest deduction under Section 24(b) is allowed for a self-occupied property under the default tax regime.
- Net income = Nil.
3. **Income from Let-out Property:**
- **Gross Annual Value (GAV):** Actual rent received = u20b91,15,000textp.m.times12textmonths=u20b913,80,000\displaystyle \\u20b91,15,000 \\text{ p.m.} \\times 12 \\text{ months} = \\u20b913,80,000.
- **Less: Municipal Taxes:** Nil (none paid).
- **Net Annual Value (NAV):** u20b913,80,000\displaystyle \\u20b913,80,000.
- **Less: Deductions under Section 24:**
- (a) Standard Deduction @ 30\displaystyle 30\\% of NAV = 30\displaystyle 30\\% \\times \\u20b913,80,000 = \\u20b94,14,000.
- (b) Interest on loan = u20b94,00,000\displaystyle \\u20b94,00,000.
- Total Deductions = u20b94,14,000+u20b94,00,000=u20b98,14,000\displaystyle \\u20b94,14,000 + \\u20b94,00,000 = \\u20b98,14,000.
- **Net Income from Let-out Property:** u20b913,80,000u20b98,14,000=u20b95,66,000\displaystyle \\u20b913,80,000 - \\u20b98,14,000 = \\u20b95,66,000.
4. **Total Income:**
- Since there is no other source of income, his total income chargeable to tax is u20b95,66,000\displaystyle \\u20b95,66,000.

Hence, **Option C** is the correct answer.

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