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Manual - Exempted Income u/s 10 - Assessee Specific
No, as per section 10(19A), if such palace or a portion of a palace is let out , then its income shall be taxable.
Letting of former ruler's palace results in taxable income under section 10(19A), not eligible for exemption. If any palace or portion occupied by a former ruler is let out, the rent or annual value of that let-out portion is not exempt and is taxable rather than eligible for the exemption applicable to former rulers.
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TaxTMI