Taxation - DT Ch 04: House Property - Test 1: answer key

Question 1 · 2 marks · Taxation - DT Ch 04: House Property · medium

Scenario. M/s Nandini Real Estates Pvt Ltd owns a commercial building in Pune. For FY 2026-27, the Pune Municipal Corporation records a municipal value of ₹9,00,000. A local valuer indicates fair rent of ₹10,20,000. The building is governed by a rent-control statute that fixes standard rent at ₹9,60,000. The company kept the building vacant in April 2026 for minor repairs and let it from 1 May 2026 to 31 March 2027 at a monthly rent of ₹95,000. All rent for the let period was received during the year. The building has an independent municipal number and is used for office purposes. The tenant paid rent through banking channels. The company did not receive arrears of earlier years. The company follows the default tax regime under section 115BAC. The managing director wants the annual value to be determined before computing income under the head Income from house property. Assume the repair period did not qualify as a period during which the property was held for letting on a temporary basis. No municipal taxes are to be considered for gross annual value. Later, the finance team asks what-if questions: if the monthly rent had been ₹85,000; if the building had remained vacant for two months at the same ₹95,000 rent; and how a refundable security deposit would be treated. The company maintains proper records and the tenancy is genuine.

What is the Reasonable Expected Rent of the Pune commercial building for FY 2026-27?

1. ₹9,00,000
2. ₹9,60,000 (correct answer)
3. ₹10,20,000
4. ₹10,45,000

Answer: B — ₹9,60,000

Explanation. Reasonable Expected Rent is the higher of municipal value and fair rent, but it cannot exceed standard rent. Higher of ₹9,00,000 and ₹10,20,000 is ₹10,20,000. Standard rent is ₹9,60,000, so Reasonable Expected Rent is restricted to ₹9,60,000. Actual rent is not used at this step. The calculation is: higher of municipal value and fair rent = ₹10,20,000; restricted to standard rent = ₹9,60,000.

Where it goes wrong. Choosing ₹10,20,000 by taking only the higher of municipal value and fair rent and ignoring the standard rent ceiling.

Authority. Section 23(1)(a) of the Income-tax Act, 1961

Question 2 · 2 marks · Taxation - DT Ch 04: House Property · medium

What is the gross annual value of the Pune commercial building for FY 2026-27?

1. ₹9,60,000
2. ₹10,20,000
3. ₹10,45,000 (correct answer)
4. ₹11,40,000

Answer: C — ₹10,45,000

Explanation. Reasonable Expected Rent is ₹9,60,000. The property was let for 11 months at ₹95,000 per month. Actual rent for the let period is 11 × ₹95,000 = ₹10,45,000. Since actual rent exceeds Reasonable Expected Rent, gross annual value is the actual rent of ₹10,45,000. The one-month vacancy is already reflected in the 11-month rent. There is no separate deduction for vacancy when actual rent for the let period exceeds Reasonable Expected Rent.

Where it goes wrong. Deducting an additional vacancy loss from ₹10,45,000 or choosing Reasonable Expected Rent of ₹9,60,000.

Authority. Section 23(1)(b) of the Income-tax Act, 1961

Question 3 · 2 marks · Taxation - DT Ch 04: House Property · hard

If the monthly rent had been ₹85,000 and the building had remained vacant only in April 2026, what would be the gross annual value?

1. ₹9,60,000
2. ₹9,35,000 (correct answer)
3. ₹10,20,000
4. ₹9,00,000

Answer: B — ₹9,35,000

Explanation. Reasonable Expected Rent remains ₹9,60,000. Actual rent for 11 months is 11 × ₹85,000 = ₹9,35,000. Actual rent is lower than Reasonable Expected Rent because the property was vacant for one month. Under section 23(1)(c), where actual rent is lower than Reasonable Expected Rent owing to vacancy, gross annual value is the actual rent. Therefore, gross annual value is ₹9,35,000, not ₹9,60,000.

Where it goes wrong. Applying the normal higher-of rule and selecting ₹9,60,000 despite the vacancy exception.

Authority. Section 23(1)(c) of the Income-tax Act, 1961

Question 4 · 2 marks · Taxation - DT Ch 04: House Property · hard

If the building had remained vacant in April and May 2026 and was let for 10 months at ₹95,000 per month, what would be the gross annual value?

1. ₹9,60,000
2. ₹10,45,000
3. ₹11,40,000
4. ₹9,50,000 (correct answer)

Answer: D — ₹9,50,000

Explanation. Reasonable Expected Rent is ₹9,60,000. Actual rent for 10 months is 10 × ₹95,000 = ₹9,50,000. Actual rent is lower than Reasonable Expected Rent because of two months vacancy. Section 23(1)(c) applies, so gross annual value is actual rent of ₹9,50,000. The vacancy exception prevents substitution by Reasonable Expected Rent even though ₹9,60,000 is higher.

Where it goes wrong. Selecting ₹9,60,000 by ignoring the vacancy-linked actual rent exception.

Authority. Section 23(1)(c) of the Income-tax Act, 1961

Question 5 · 2 marks · Taxation - DT Ch 04: House Property · medium

Scenario. Smt. Anuradha Sen owns a residential house in Kolkata. For FY 2026-27, municipal value is ₹4,80,000, fair rent is ₹5,40,000 and standard rent under the rent-control law is ₹5,10,000. She let the house from 1 April 2026 at ₹46,000 per month. The tenant paid rent for April to December 2026. From January 2027, the tenant’s business suffered a sudden loss due to a government transport ban, and he could not pay rent for January to March 2027, amounting to ₹1,38,000. Smt. Sen issued reminders and initiated recovery steps. Her accountant wrote off the amount in the books as irrecoverable. The tenancy is bona fide and the tenant’s inability arose from circumstances beyond his control. She follows the default tax regime under section 115BAC. No municipal taxes are relevant for gross annual value. The house was not vacant during the year. Her son asks what would happen if the write-off condition had not been met, or if the tenant’s inability had not been established. Assume all other Rule 4 conditions are otherwise satisfied. She wants the gross annual value computed for AY 2027-28.

What is the Reasonable Expected Rent of Smt. Anuradha Sen’s Kolkata house for FY 2026-27?

1. ₹4,80,000
2. ₹5,40,000
3. ₹5,10,000 (correct answer)
4. ₹5,52,000

Answer: C — ₹5,10,000

Explanation. Reasonable Expected Rent is the higher of municipal value and fair rent, restricted to standard rent. Higher of ₹4,80,000 and ₹5,40,000 is ₹5,40,000. Standard rent is ₹5,10,000, so the amount is capped at ₹5,10,000. Actual rent and unrealized rent are considered later and do not affect this cap. Thus, Reasonable Expected Rent is ₹5,10,000.

Where it goes wrong. Selecting ₹5,40,000 by not applying the standard rent ceiling.

Authority. Section 23(1)(a) of the Income-tax Act, 1961

Question 6 · 2 marks · Taxation - DT Ch 04: House Property · hard

What is the actual rent after applying Rule 4 if all conditions for unrealized rent are satisfied?

1. ₹4,14,000 (correct answer)
2. ₹4,60,000
3. ₹5,10,000
4. ₹5,52,000

Answer: A — ₹4,14,000

Explanation. Annual rent receivable is 12 × ₹46,000 = ₹5,52,000. Unrealized rent for January to March 2027 is 3 × ₹46,000 = ₹1,38,000. Since the tenancy is bona fide, the tenant’s inability is due to circumstances beyond control, recovery steps were taken and the amount was written off, Rule 4 permits exclusion. Actual rent after exclusion is ₹5,52,000 − ₹1,38,000 = ₹4,14,000.

Where it goes wrong. Using the full annual rent of ₹5,52,000 or deducting only two months rent.

Authority. Rule 4 of the Income-tax Rules, 1962; Section 23(1) of the Income-tax Act, 1961

Question 7 · 2 marks · Taxation - DT Ch 04: House Property · hard

If all Rule 4 conditions are satisfied, what is the gross annual value of the Kolkata house?

1. ₹4,14,000
2. ₹4,80,000
3. ₹5,10,000 (correct answer)
4. ₹5,52,000

Answer: C — ₹5,10,000

Explanation. Reasonable Expected Rent is ₹5,10,000. Actual rent after excluding unrealized rent under Rule 4 is ₹4,14,000. The property was not vacant, so the section 23(1)(c) vacancy exception does not apply. Actual rent is lower than Reasonable Expected Rent only because of unrealized rent. Therefore, gross annual value is Reasonable Expected Rent of ₹5,10,000, not the reduced actual rent.

Where it goes wrong. Selecting ₹4,14,000 by treating unrealized rent as vacancy loss.

Authority. Section 23(1)(a) of the Income-tax Act, 1961; Rule 4 of the Income-tax Rules, 1962

Question 8 · 2 marks · Taxation - DT Ch 04: House Property · hard

If the tenant’s inability had not been established and the amount had not been written off, what would be the gross annual value?

1. ₹4,14,000
2. ₹5,10,000
3. ₹5,40,000
4. ₹5,52,000 (correct answer)

Answer: D — ₹5,52,000

Explanation. Rule 4 exclusion fails if the required conditions are not met. Actual rent receivable is then 12 × ₹46,000 = ₹5,52,000. Reasonable Expected Rent is ₹5,10,000. Since actual rent exceeds Reasonable Expected Rent, gross annual value is actual rent of ₹5,52,000. The house was not vacant, so no vacancy exception applies.

Where it goes wrong. Still deducting ₹1,38,000 even though the write-off and inability conditions are not met.

Authority. Section 23(1)(b) of the Income-tax Act, 1961; Rule 4 of the Income-tax Rules, 1962

Question 9 · 2 marks · Taxation - DT Ch 04: House Property · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Vikramaditya Tech Labs LLP owns a let-out office. Its municipal value is ₹8,40,000, fair rent is ₹9,00,000 and standard rent is ₹8,70,000. The office was let throughout FY 2026-27 at ₹72,000 per month. Municipal taxes paid by the LLP are ₹60,000. What is the gross annual value?

1. ₹8,70,000 (correct answer)
2. ₹8,40,000
3. ₹8,64,000
4. ₹9,00,000

Answer: A — ₹8,70,000

Explanation. Reasonable Expected Rent is higher of ₹8,40,000 and ₹9,00,000, i.e. ₹9,00,000, restricted to standard rent of ₹8,70,000. Actual rent is 12 × ₹72,000 = ₹8,64,000. Actual rent is lower than Reasonable Expected Rent and there is no vacancy. Hence gross annual value is ₹8,70,000. Municipal taxes do not reduce gross annual value; they are considered later in net annual value.

Where it goes wrong. Deducting municipal taxes of ₹60,000 from gross annual value or comparing actual rent with municipal value only.

Authority. Section 23(1)(a) of the Income-tax Act, 1961

Question 10 · 2 marks · Taxation - DT Ch 04: House Property · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Aryan Steels Ltd let a property at ₹1,20,000 per month. Municipal value is ₹12,00,000, fair rent is ₹13,00,000 and standard rent is ₹14,00,000. The property remained vacant for two months. Actual rent received for the let period was ₹12,00,000. What is the gross annual value?

1. ₹13,00,000
2. ₹12,00,000 (correct answer)
3. ₹14,40,000
4. ₹14,00,000

Answer: B — ₹12,00,000

Explanation. Reasonable Expected Rent is higher of ₹12,00,000 and ₹13,00,000, i.e. ₹13,00,000, and standard rent of ₹14,00,000 does not reduce it. Actual rent for 10 months is ₹12,00,000. Actual rent is lower than Reasonable Expected Rent owing to two months vacancy. Under section 23(1)(c), gross annual value is actual rent of ₹12,00,000.

Where it goes wrong. Selecting ₹13,00,000 as Reasonable Expected Rent without applying the vacancy-linked actual rent exception.

Authority. Section 23(1)(c) of the Income-tax Act, 1961

Question 11 · 2 marks · Taxation - DT Ch 04: House Property · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Smt. Leela owns a shop. Rent receivable for FY 2026-27 is ₹6,00,000. The tenant defaulted on ₹1,00,000. The tenancy is bona fide, the tenant’s inability is due to circumstances beyond control and recovery steps were taken, but the amount was not written off in the books. Reasonable Expected Rent is ₹5,50,000. What is the gross annual value?

1. ₹5,50,000
2. ₹5,00,000
3. ₹6,00,000 (correct answer)
4. ₹4,50,000

Answer: C — ₹6,00,000

Explanation. Rule 4 allows exclusion of unrealized rent only if all conditions are satisfied, including writing off the amount in the books. Since that condition is not met, the default of ₹1,00,000 cannot be excluded. Actual rent remains ₹6,00,000. This exceeds Reasonable Expected Rent of ₹5,50,000, so gross annual value is ₹6,00,000.

Where it goes wrong. Deducting ₹1,00,000 merely because the tenant defaulted and recovery steps were taken.

Authority. Rule 4 of the Income-tax Rules, 1962; Section 23(1)(b) of the Income-tax Act, 1961

Question 12 · 2 marks · Taxation - DT Ch 04: House Property · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Mr. Raghav owns a let-out property. Municipal value is ₹8,00,000, fair rent is ₹9,00,000 and standard rent is ₹7,00,000. Actual rent is ₹6,50,000. The property was not vacant during FY 2026-27. What is the gross annual value?

1. ₹6,50,000
2. ₹7,00,000 (correct answer)
3. ₹8,00,000
4. ₹9,00,000

Answer: B — ₹7,00,000

Explanation. Reasonable Expected Rent is higher of ₹8,00,000 and ₹9,00,000, i.e. ₹9,00,000, restricted to standard rent of ₹7,00,000. Actual rent is ₹6,50,000. Since actual rent is lower than Reasonable Expected Rent and there is no vacancy, the normal higher-of rule gives gross annual value of ₹7,00,000.

Where it goes wrong. Selecting actual rent of ₹6,50,000 without comparing it with the standard-rent-capped Reasonable Expected Rent.

Authority. Section 23(1)(a) of the Income-tax Act, 1961

Question 13 · 2 marks · Taxation - DT Ch 04: House Property · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Nandini Real Estates has a let-out property with municipal value ₹11,00,000, fair rent ₹12,00,000 and standard rent ₹11,80,000. Monthly rent is ₹95,000. The tenant paid a refundable security deposit of ₹2,00,000 carrying no interest. What is the gross annual value?

1. ₹11,80,000 (correct answer)
2. ₹11,40,000
3. ₹11,00,000
4. ₹12,00,000

Answer: A — ₹11,80,000

Explanation. Reasonable Expected Rent is higher of ₹11,00,000 and ₹12,00,000, i.e. ₹12,00,000, restricted to standard rent of ₹11,80,000. Actual rent is 12 × ₹95,000 = ₹11,40,000. A refundable security deposit is not rent. Actual rent is lower than Reasonable Expected Rent and there is no vacancy, so gross annual value is ₹11,80,000.

Where it goes wrong. Adding the refundable security deposit to rent or choosing actual rent of ₹11,40,000.

Authority. Section 23(1) of the Income-tax Act, 1961

Question 14 · 2 marks · Taxation - DT Ch 04: House Property · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A property has municipal value ₹6,00,000, fair rent ₹6,60,000 and standard rent ₹6,30,000. It was let at ₹55,000 per month but remained vacant for one month. Actual rent received for 11 months is ₹6,05,000. What is the gross annual value?

1. ₹6,05,000 (correct answer)
2. ₹6,30,000
3. ₹6,60,000
4. ₹6,00,000

Answer: A — ₹6,05,000

Explanation. Reasonable Expected Rent is higher of ₹6,00,000 and ₹6,60,000, i.e. ₹6,60,000, restricted to standard rent of ₹6,30,000. Actual rent for 11 months is ₹6,05,000. Actual rent is lower than Reasonable Expected Rent owing to one month vacancy. Section 23(1)(c) applies, so gross annual value is actual rent of ₹6,05,000.

Where it goes wrong. Selecting ₹6,30,000 as Reasonable Expected Rent without applying the vacancy exception.

Authority. Section 23(1)(c) of the Income-tax Act, 1961

Question 15 · 2 marks · Taxation - DT Ch 04: House Property · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A let-out property has municipal value ₹7,00,000, fair rent ₹8,00,000 and standard rent ₹7,80,000. Monthly rent is ₹65,000 throughout FY 2026-27. The owner paid municipal taxes of ₹40,000. What is the gross annual value?

1. ₹7,40,000
2. ₹7,60,000
3. ₹8,00,000
4. ₹7,80,000 (correct answer)

Answer: D — ₹7,80,000

Explanation. Reasonable Expected Rent is higher of ₹7,00,000 and ₹8,00,000, i.e. ₹8,00,000, restricted to standard rent of ₹7,80,000. Actual rent is 12 × ₹65,000 = ₹7,80,000. Actual rent equals Reasonable Expected Rent, so gross annual value is ₹7,80,000. Municipal taxes are deducted later while computing net annual value and do not reduce gross annual value.

Where it goes wrong. Deducting ₹40,000 municipal taxes from ₹7,80,000 to arrive at ₹7,40,000.

Authority. Section 23(1) of the Income-tax Act, 1961

Question 16 · 2 marks · Taxation - DT Ch 04: House Property · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Rent receivable from a let-out property is ₹9,60,000. Unrealized rent is ₹1,20,000 and all Rule 4 conditions are satisfied. Reasonable Expected Rent is ₹8,00,000. The property was not vacant. What is the gross annual value?

1. ₹8,00,000
2. ₹9,60,000
3. ₹10,80,000
4. ₹8,40,000 (correct answer)

Answer: D — ₹8,40,000

Explanation. After excluding unrealized rent under Rule 4, actual rent is ₹9,60,000 − ₹1,20,000 = ₹8,40,000. Reasonable Expected Rent is ₹8,00,000. Since actual rent after exclusion exceeds Reasonable Expected Rent and there is no vacancy, gross annual value is ₹8,40,000. The exclusion is applied before comparing actual rent with Reasonable Expected Rent.

Where it goes wrong. Selecting ₹9,60,000 by ignoring Rule 4 or ₹8,00,000 by wrongly applying the higher-of rule before exclusion.

Authority. Rule 4 of the Income-tax Rules, 1962; Section 23(1)(b) of the Income-tax Act, 1961

Question 17 · 2 marks · Taxation - DT Ch 04: House Property · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A property was let from 1 July 2026 at ₹1,00,000 per month. It remained vacant from April to June 2026. Municipal value is ₹9,00,000, fair rent is ₹10,00,000 and standard rent is ₹9,50,000. What is the gross annual value?

1. ₹9,50,000
2. ₹10,00,000
3. ₹12,00,000
4. ₹9,00,000 (correct answer)

Answer: D — ₹9,00,000

Explanation. Reasonable Expected Rent is higher of ₹9,00,000 and ₹10,00,000, i.e. ₹10,00,000, restricted to standard rent of ₹9,50,000. Actual rent for 9 months is 9 × ₹1,00,000 = ₹9,00,000. Actual rent is lower than Reasonable Expected Rent because of three months vacancy. Thus gross annual value is actual rent of ₹9,00,000.

Where it goes wrong. Selecting ₹9,50,000 by applying the higher-of rule without the vacancy exception.

Authority. Section 23(1)(c) of the Income-tax Act, 1961

Question 18 · 2 marks · Taxation - DT Ch 04: House Property · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A property has municipal value ₹15,00,000 and fair rent ₹14,00,000. Standard rent is not applicable. Actual rent is ₹13,50,000 and the property was not vacant. What is the gross annual value?

1. ₹15,00,000 (correct answer)
2. ₹13,50,000
3. ₹14,00,000
4. ₹15,50,000

Answer: A — ₹15,00,000

Explanation. Where standard rent does not apply, Reasonable Expected Rent is simply the higher of municipal value and fair rent. Higher of ₹15,00,000 and ₹14,00,000 is ₹15,00,000. Actual rent is ₹13,50,000, which is lower, and there is no vacancy. Therefore gross annual value is ₹15,00,000.

Where it goes wrong. Choosing actual rent of ₹13,50,000 or fair rent of ₹14,00,000 despite municipal value being higher.

Authority. Section 23(1)(a) of the Income-tax Act, 1961

Question 19 · 2 marks · Taxation - DT Ch 04: House Property · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Rent receivable from a property is ₹7,20,000. Unrealized rent is ₹90,000 and Rule 4 conditions are satisfied. Reasonable Expected Rent is ₹6,80,000. The property was not vacant. What is the gross annual value?

1. ₹6,30,000
2. ₹6,80,000 (correct answer)
3. ₹7,20,000
4. ₹5,90,000

Answer: B — ₹6,80,000

Explanation. Actual rent after Rule 4 exclusion is ₹7,20,000 − ₹90,000 = ₹6,30,000. Reasonable Expected Rent is ₹6,80,000. The property was not vacant, so actual rent is lower than Reasonable Expected Rent for reasons other than vacancy. Gross annual value is therefore Reasonable Expected Rent of ₹6,80,000.

Where it goes wrong. Choosing ₹6,30,000 by treating Rule 4 exclusion as automatically reducing gross annual value.

Authority. Rule 4 of the Income-tax Rules, 1962; Section 23(1)(a) of the Income-tax Act, 1961

Question 20 · 2 marks · Taxation - DT Ch 04: House Property · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A property was let throughout FY 2026-27 at ₹90,000 per month. Rent for March 2027 was received in April 2027. There is no Rule 4 issue. Municipal value is ₹10,00,000, fair rent is ₹10,50,000 and standard rent is ₹10,20,000. What is the gross annual value?

1. ₹9,90,000
2. ₹10,20,000
3. ₹10,80,000 (correct answer)
4. ₹11,70,000

Answer: C — ₹10,80,000

Explanation. Gross annual value uses rent received or receivable, not merely cash received during the year. Annual rent receivable is 12 × ₹90,000 = ₹10,80,000. Reasonable Expected Rent is higher of ₹10,00,000 and ₹10,50,000, i.e. ₹10,50,000, restricted to standard rent of ₹10,20,000. Since actual rent receivable exceeds Reasonable Expected Rent, gross annual value is ₹10,80,000.

Where it goes wrong. Using only 11 months rent of ₹9,90,000 because March rent was received after year-end.

Authority. Section 23(1)(b) of the Income-tax Act, 1961