Answer

1. F

   Facts

   You can treat up to two houses as self-occupied, with nil annual value. Any other house you own that is not let out is treated as deemed let out and taxed on expected rent. You choose which two to treat as self-occupied each year.

2. P

   Provisions and law

   • Sec 23, Income-tax Act 1961Annual value rules: up to two self-occupied houses have nil annual value; others are treated as let out at expected rent
   • Sec 22 (now Sec 20)Annual value of property you own is taxed under house property
3. A

   Analysis

   Sec 23 of the Income-tax Act 1961 lets the owner claim nil annual value for up to two houses used for own residence or not used because of work elsewhere. The third house, even if empty, is deemed let out at its expected rent, such as municipal or fair rent. So if two houses are in Delhi and one in Jaipur, all empty, two can be nil and the third is taxed on notional rent. Choose the two with the highest expected rent as self-occupied to save tax.

4. C

   Conclusion

   1. 1List each house with its expected rent.
   2. 2Pick the two highest as self-occupied.
   3. 3Compute deemed rent for the others.
   4. 4Fill Schedule HP property by property.

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