Mr. Arjun and Mr. Rohit started constructing independent residential houses on plot of land situated in Delhi. Each house comprises a ground floor…

Computation of income from house property of Mr. Arjun for A.Y. 2025-26 under normal provision of the Act Particulars ₹ ₹ Annual value is nil (since house is self-occupied) Nil Less: Deduction under section 24(b) Interest on borrowed capital - 15,00,000 @ 12% 1,80,000 Pre-construction interest [Interest from 1.4.2022 to 31.3.2024 in 5 equal installments] [₹ 3,60,000/5] 72,000 2,52,000 As per second proviso to section 24(b), interest deduction restricted to 2,00,000 Loss under the head "Income from house property" of Mr. Arjun (2,00,000) Computation of income from house property of Mr. Rohit for A.Y. 2025-26 under normal provision of the Act Particulars Ground floor (Self occupied) ₹ First floor ₹ Gross annual value (See Note below) Nil 60,000 Less: Municipal taxes (for first floor) 4,000 (A) Net annual value Nil 56,000 Less: Deduction under section 24 (a) 30% of net annual value 16,800 (b) Interest on borrowed capital Current year interest 10,00,000 x 10% = 1,00,000 50,000 50,000 Pre-construction interest 10,00,000 x 10% x 21/12 = 1,75,000 1,75,000 allowed in 5 equal installments - 1,75,000/5 = 35,000 per annum 17,500 17,500 (B) Total deduction under section 24 67,500 84,300 Income from house property (A)-(B) (67,500) (28,300) Loss under the head "Income from house property" of Mr. Rohit (both ground floor and first floor) (95,800) Note: Computation of Gross Annual Value (GAV) of first floor of Rohit's house The Expected Rent is the higher of fair rent and municipal value. This should be considered for 6 months since the construction of property was completed only on 30.9.2024. Expected rent = 50,000 being higher of - Fair rent = 1,00,000 x 6 /12 = 50,000 Municipal value = 72,000 x 6/12 = 36,000 Actual rent = 60,000 (₹ 20,000 p.m. for 3 months from October to December, 2024)