MCQ on Income From House Property
MCQs on Income from House Property help assess knowledge of taxation rules under the Income Tax Act, 1961. These questions cover concepts like Gross Annual Value (GAV), deductions under Section 24, self-occupied vs. let-out property, and tax treatment of municipal taxes and loan interest. Ideal for students, tax professionals, and competitive exam aspirants.
1) The basis of charge of income under heads of house property is Annual Property of property
1) Annual value
2) Annual rent
3) Municipal value
4) Fair value
Answer:- Annual Value
2) Annual value is defined under section
1) 23/1
2) 23/2
3) 23/3
4) 23/4
Answer:- 1) 23/1
3) Interest for pre acquisition period is deduct cable in---------installments
1) 5
2) 6
3) 7
4) 8
Answer:- 1) 5
4) Which rent is a fixed under rent control act
1) Standard rent
2) Fixed rent
3) Unrealised rent
4) Annual rent
Answer:-1) Standard rent
5) Which deduction is applicable for income from house property?
1) U/s 24
2) U/s 25
3) U/s 26
4) U/s 27
Answer:-1) U/s 24t
6) Gross Annual Value of self occupied house property is
1) Nil
2) Fair Rent
3) Expected Rent
4) Normal Rent
Answer:1) Nil
7) Standard deduction for house property is
1) 30%
2) 20%
3) 10%
4) 5%
Answer:1) 30%
8) Municipal tax is to be charged on the
1) Municipal value of the property
2) Fare value of property
3) Standard rent
4) Actual rent
Answer:1) Municipal value of the property
9). The annual value of a house property is determined by:
A) The fair market value of the property
B) The municipal value of the property
C) The higher of the municipal value or fair market value
D) The higher of the actual rent received or receivable, subject to a maximum limit
Answer:B) The municipal value of the property
10). If the property is let out and the rent is not received for a particular year, the income is:
A) Not charged to tax
B) Charged to tax under the head “Income from Other Sources”
C) Charged to tax under the head “Income from House Property” based on expected rental value
D) Ignored for tax purposes
Answer:C) Charged to tax under the head “Income from House Property” based on expected rental value
11). Which of the following expenses is NOT allowed as a deduction while computing income from house property?
A) Interest on borrowed capital for the property
B) Municipal taxes paid
C) Repairs and maintenance of the property
D) Insurance premium on the property
Answer: C) Repairs and maintenance of the property
12). In case of a self-occupied property, the income to be charged under the head “Income from House Property” is:
A) The actual rent received from the property
B) Nil (No income is charged)
C) The fair market value of the property
D) The municipal value of the property
Answer:B) Nil (No income is charged)
13). Which of the following is the correct formula to compute the net annual value (NAV) of a property?
A) NAV = Gross Annual Value – Municipal Taxes paid
B) NAV = Municipal Value + Rent Received
C) NAV = Rent Received + Fair Market Value
D) NAV = Gross Annual Value + Insurance Premium
Answer:A) NAV = Gross Annual Value – Municipal Taxes paid
14). In the case of a house property which is not rented but occupied by the owner for residential purposes, what is the maximum deduction allowed on interest on borrowed capital under Section 24(b)?
A) ₹1.5 lakh
B) ₹2 lakh
C) ₹3 lakh
D) ₹50,000
Answer: B) ₹2 lakh
15). In case of a property that is let out for part of the year, the income from house property will be calculated on a:
A) Proportionate basis for the period of let out
B) Fixed annual value irrespective of the period of rent
C) Deemed rental income basis
D) Monthly average of rent received
Answer: A) Proportionate basis for the period of let out
16). If a taxpayer owns more than one self-occupied house property, how much of the value will be charged to tax under the head "Income from House Property"?
A) Income from all properties will be charged to tax
B) Only one property will be considered as self-occupied, and the others will be treated as deemed to be let out
C) All properties will be considered as deemed to be let out
D) No income will be charged to tax
**Answer:** B) Only one property will be considered as self-occupied, and the others will be treated as deemed to be let out
17) . What is the maximum amount of municipal taxes that can be deducted from the Gross Annual Value (GAV) of a property under Section 23(1)?
A) 100% of the municipal taxes paid
B) 50% of the municipal taxes paid
C) Only property tax is deductible
D) Municipal taxes paid can be deducted only from rental income, not from GAV
Answer:A) 100% of the municipal taxes paid
18). If a property is under construction and not let out during the year, the income from house property will be:
A) Considered as income from other sources
B) Charged to tax as if the property is self-occupied
C) Charged to tax only if the property is ready to be let out
D) Not charged to tax until the property is completed and let out
Answer: D) Not charged to tax until the property is completed and let out
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