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Taxation of Rental Income: Computation and Assessment

Description: This quiz will test your understanding of the concepts related to the taxation of rental income in India, including computation and assessment.
Number of Questions: 14
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Tags: taxation rental income computation assessment indian taxation
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In India, rental income is taxed under which head of income?

  1. Income from House Property

  2. Income from Business or Profession

  3. Income from Capital Gains

  4. Income from Other Sources

Show answer
Correct Option: A
Explanation:

Rental income is considered as income from house property under the Indian Income Tax Act, 1961.

What is the basic exemption limit for rental income in India?

  1. ₹2,50,000

  2. ₹3,00,000

  3. ₹4,00,000

  4. ₹5,00,000

Show answer
Correct Option: A
Explanation:

As per the Indian Income Tax Act, 1961, the basic exemption limit for rental income is ₹2,50,000 for individuals and HUFs.

How is the net annual value (NAV) of a property calculated for the purpose of taxation?

  1. Gross rental income - Municipal taxes

  2. Gross rental income - Interest on housing loan

  3. Gross rental income - Depreciation

  4. Gross rental income - Repairs and maintenance expenses

Show answer
Correct Option: A
Explanation:

The NAV of a property is calculated by deducting municipal taxes from the gross rental income.

What is the standard deduction allowed on rental income?

  1. 30%

  2. 25%

  3. 20%

  4. 15%

Show answer
Correct Option: A
Explanation:

A standard deduction of 30% is allowed on rental income to cover expenses such as repairs, maintenance, and insurance.

Can interest paid on a housing loan be claimed as a deduction from rental income?

  1. Yes

  2. No

  3. Only if the loan is taken for the construction of a new property

  4. Only if the loan is taken for the purchase of a property

Show answer
Correct Option: A
Explanation:

Interest paid on a housing loan can be claimed as a deduction from rental income, irrespective of the purpose of the loan.

What is the rate of depreciation allowed on a residential property?

  1. 5%

  2. 10%

  3. 15%

  4. 20%

Show answer
Correct Option: A
Explanation:

Depreciation is allowed at the rate of 5% on the cost of construction of a residential property.

Can depreciation be claimed on a property that is self-occupied?

  1. Yes

  2. No

  3. Only if the property is rented out for a part of the year

  4. Only if the property is used for commercial purposes

Show answer
Correct Option: B
Explanation:

Depreciation cannot be claimed on a property that is self-occupied.

What is the tax rate applicable to rental income?

  1. Slab rates as per the individual's income tax slab

  2. Flat rate of 30%

  3. Flat rate of 20%

  4. Flat rate of 10%

Show answer
Correct Option: A
Explanation:

Rental income is taxed at the slab rates applicable to the individual's total income.

Is there any additional tax liability if the rental income exceeds a certain limit?

  1. Yes, surcharge is applicable if the rental income exceeds ₹50 lakhs

  2. Yes, cess is applicable if the rental income exceeds ₹1 crore

  3. Yes, both surcharge and cess are applicable

  4. No, there is no additional tax liability

Show answer
Correct Option: C
Explanation:

If the rental income exceeds ₹50 lakhs, surcharge is applicable, and if it exceeds ₹1 crore, cess is also applicable.

What is the due date for filing the income tax return for rental income?

  1. July 31st

  2. August 31st

  3. September 30th

  4. October 31st

Show answer
Correct Option: A
Explanation:

The due date for filing the income tax return for rental income is July 31st of the assessment year.

Can losses from rental income be set off against other heads of income?

  1. Yes, losses can be set off against income from other heads

  2. No, losses cannot be set off against income from other heads

  3. Losses can be set off only against income from house property

  4. Losses can be set off only against income from business or profession

Show answer
Correct Option: A
Explanation:

Losses from rental income can be set off against income from other heads of income, subject to certain conditions.

What is the time limit for carrying forward and setting off losses from rental income?

  1. 4 years

  2. 5 years

  3. 6 years

  4. 8 years

Show answer
Correct Option: D
Explanation:

Losses from rental income can be carried forward and set off against income from other heads for a period of 8 years.

Is there any specific exemption available for rental income from a newly constructed property?

  1. Yes, exemption is available for 2 years from the date of completion

  2. Yes, exemption is available for 3 years from the date of completion

  3. Yes, exemption is available for 5 years from the date of completion

  4. No, there is no specific exemption available

Show answer
Correct Option: A
Explanation:

Rental income from a newly constructed property is exempt from tax for a period of 2 years from the date of completion.

What is the impact of GST on rental income?

  1. GST is applicable on rental income

  2. GST is not applicable on rental income

  3. GST is applicable only on rental income from commercial properties

  4. GST is applicable only on rental income from residential properties

Show answer
Correct Option: B
Explanation:

GST is not applicable on rental income, whether it is from commercial or residential properties.

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