The annual value of a let-out property before municipal taxes is ₹70,000. The owner pays ₹12,000 of municipal taxes during tax year 2026–27. What is the annual value after those taxes under section…
Question and options
The annual value of a let-out property before municipal taxes is ₹70,000. The owner pays ₹12,000 of municipal taxes during tax year 2026–27. What is the annual value after those taxes under section 21(3)?
₹58,000
₹70,000
₹82,000
₹60,000
Answer and explanation
Correct answer: A - ₹58,000
Section 21(3) of the Income-tax Act, 2025 reduces annual value by taxes levied by a local authority and actually paid by the owner during the tax year, whenever they fell due. ₹70,000 less ₹12,000 gives ₹58,000; adding the taxes instead of deducting them would give ₹82,000.
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