Ie first determine the GAV after that deduct municipal tax and unrealized rent for getting annual value of house property. Thereafter make deductions s per u/s 24 for getting the income from house property.
*Municipal tax—Tax paid by the owner to the govt.
*Unrealized rent—Irrecoverable rent due to the default of the tenant
*Std. deduction— 30% of annual value
*Interest on loan- if there is any money borrowed for repair of house then the interest on loan gets deduction from the annual value
Annual value of self occupied property is taken as nil. If it is not let out then the aforesaid expenses not allowed as deduction. But if there is any borrowed fund used for house construction or repair then an amount of Rs.30000/- allowed as deduction per annum. The interest allowable as deduction will be up to Rs150000/- per annum in case of house property acquired or constructed with borrowed capital on or after 1.4.1999 but before 1.4.2003.
House property or any portion thereof occupied by the owner for purpose of his business or profession is excluded and any expenses of current repairs, municipal taxes, depreciation on property etc. is allowable as business expenditure.
