In case of all assessees, Income from house property shall be computed as under.

a. In the case of Let Out Property [Whether for residential purpose or for business purpose]
The annual value of any property shall be deemed to be
i. The sum for which property might reasonably be expected to let from year to year or
ii. When property or any part of property is let, the annual rent received/receivable less
unrealised rent or the sum as above, whichever is higher.
iii. Where property or part of it is let and was vacant for whole or part of year, and rent
received/receivable less unrealised rent is less than the sum as per (i) above due to the vacancy,
then the rent actually received/receivable.
Deduction shall be allowed as under:
Nature of Deduction Section Limit/Condition
1 Municipal Tax, etc. 23(1) First proviso Only if borne and paid by the
owner.
2 Standard deduction 24 Clause (a) 30% of Annual Value.
3 Interest on borrowed capital 24 Clause (b) Interest payable on capital
borrowed for the purpose of
acquisition, construction,
repair, renewals or
reconstruction only. Interest
for the period prior to
acquisition or construction
would be deductible in five
equal instalments from the
year of acquisition or
construction.

B. In the case of oneself-occupied house property

The annual value of a self-occupied house or part of such house shall be nil. Further deduction
shall be allowable as under:
Nature of Deduction Section Limit/Condition
Interest on borrowed 24 Clause (b) Rs. 1,50,000/- from A.Y. 2002-03 onwards,
capital provided, i. property is acquired or
constructed on or after 1-4-1999 and such
acquisition or construction is completed within
3 years from the end of the financial year in
which capital was borrowed. ii. A certificate
from the lender certifying interest payable
to him is furnished by the assessee. In other
cases, Rs. 30,000. Interest in excess of above
may qualify for rebate u/s. 80C(2)(xviii) (Re :
Krishnan Kuppuswami vs. ITO 74, Taxman
289) (Pune Trib.). No other deduction allowed
in respect of oneself-occupied property whose
value is taken at Rs. NIL. -
C. In the case of more than oneself-occupied house property
Only one house according to assessees choice is treated as self-occupied and deduction
mentioned in B will be allowed. In respect of all other houses, even though self-occupied,
notional income as A(i) above-mentioned will have to be computed. In such cases, all deductions
mentioned in A would be available.
D. For set off and carry forward of losses.

Sr. no. Section Set off Against Income Can be

carried
In same In
forward for
Assessment subsequ
Year ent
Assessm
ent Yea
71B House Property:
a) Let out property Income from Income 8 years
House from
property head House
or any other property
head
b) Self-occupied As above As above 8 years
Property (On
account of interest
on borrowed
capital)

E. Property owned by co-owners

Where property consisting of buildings or buildings and lands appurtenant thereto is owned by
two or more persons and their respective shares are definite and ascertainable, such persons
shall not be assessed as an A.O.P. (Association of Persons) but the share of each person in the
income from the property as computed u/ss. 22 to 25 (i.e., Income from house property) shall be
included in his total income.
F. Arrear of Rent S. 25B
Arrear of rent received in respect of let out property, if not charged to tax in earlier previous year,
is taxable in the year of receipt after deducting 30% of such amount for repair etc.

What is VAT?

Value Added Tax is the tax imposed for sales of goods in India.Each state in India has
separate VAT regulation and different tax rates applicable for different products .The tax
needs to be collected from consumers and deposited in a designated bank account to the
state government. You then need to file VAT returns each month if you're running a
private limited company and quarterly if you're running a partnership, LLP or
proprietorship.
Following are the advantages of VAT:

1. Easy to Administer & Transparent and Less Litigation,

2. Abolition of Statutory Forms,

3. Deterrent against Tax Avoidance,

4. No Cascading(tax on tax) Effect,

5. Minimum Exemptions,
6.Removal of Anomaly of First Point Taxation.

6. As compared to other taxes, there is a less chance of tax evasion. VAT minimizes tax evasion
due to its catch-up effect.

7. VAT is simple to administer as compared to other indirect tax.

8. VAT is transparent and has minimum burden to consumers as it is collected in small
fragments at various stages of production and distribution.
9. VAT is based on value added not on total price. So, price does not increases as a result of
VAT.
10. There is mass participation of taxpayers.
Disadvantages

Following are the disadvantages of VAT:

1. Refund of Tax(VAT credit can not be availed if no tax is payable on final product being exempt
or taxable at lower rate.)
2.Increase in Investment
3.Non-availability of credit for tax paid on interstate purchases in initial years.

2. VAT is costly to implement as it is based on full billing system.

3. VAT is relatively complex to understand. The calculation of value added in every stage is not
an easy task.

4. To implement the VAT successfully, customers, need to be conscious, otherwise tax evasion
will be widespread.

Merits of VAT
i. Encourage exportation as exports are zero rate
ii. Has wide coverage-charge on goods and services
iii. Has no cascading effect (i.e. Not charged on another Tax)
iv. Improves efficiency; since charged on value added. Hence a person will all the time
try to reduce their costs
v. It is convenient since paid only when a person has to buy goods or service
vi. It is economical for the Government to operate it
vii. Gives exemption to small traders
viii. Not charged on essential goods
Demerits of VAT
i. The administration of VAT is complicated since it requires proper records and financial
structures to be maintained
ii. It is easy to avoid
iii. It does not discriminate the poor
 iv. Not all traders of similar goods are covered by it, hence creating marketing
imperfection
v. It feeds inflation
vi. Lack of civic consciousness, since in most cases a person is not aware he is paying
tax

SEC.10- OFFENCES & PENALTIES

The offences listed hereunder and committed by a person would be punishable with
simple imprisonment which may extend to 6 months, or with fine or with both. The
offenses are:

a Furnishing an incorrect certificate or declaration under the following

provisions:

Sec.6(2) Subsequent sale

Sec.6A Consignment sale
Sec.8(4) ISS (C/D)
Sec.8(8) SEZ

b Failure to get registration or failure to furnish security.

c Being a registered dealer, representing falsely when purchasing any goods, that
such goods are covered by his certificate of registration.

d Not being a registered dealer, falsely representing that he is a registered

dealer.

e After purchasing any goods for specific purposes stipulated U/s.8(3), failure to
make use of the goods for any such purpose.

f Being in possession of any form prescribed for the purpose of Sec.8(4) but not
obtained in accordance with the provisions of the Act or Rules.

g Collection of any amount by way of tax without being a registered dealer or in

violation of the provisions of the Act or Rules.