For a property, the municipal value is ₹6,000, the fair rent is ₹8,000 and the standard rent under the applicable rent-control law is ₹7,000. What is the sum for which the property might reasonably…
Question and options
For a property, the municipal value is ₹6,000, the fair rent is ₹8,000 and the standard rent under the applicable rent-control law is ₹7,000. What is the sum for which the property might reasonably be expected to let?
₹8,000
₹13,000
₹6,000
₹7,000
Answer and explanation
Correct answer: D - ₹7,000
The expected rent under section 21(1)(a) of the Income-tax Act, 2025 is found by taking the higher of municipal value and fair rent (₹8,000) and capping it at the standard rent (₹7,000). ₹8,000 ignores the rent-control ceiling.
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