Page 237 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes Computation of Gross Annual Value
Step 1: Expected Rent 65,000 1, 50,000
Step 2: Actual Rent (After deducting unrealized rent) if higher
than Expected Rent then Actual rent otherwise Expected rent 75,000 N.A.
Step 3: Applicable only in case of vacancy N.A. N.A.
Gross Annual Value 75,000 1, 50,000

Example: There is vacancy but no unrealized rent
Find out the gross annual value in the case of the following properties for the Assessment year
2013–14
Particulars P Q R S
Expected Rent 70 55 85 125
Rent Per Month (if let out) 7 5 8 8

Let out period (in months) 11 0 9 10
Vacancy (in months) 1 12 3 2
Further all the rents were realized for the year by the assessee.

Solution:
Calculation of Gross Annual Value of Mr. X for A.Y 2013–14 P Q R S
Annual Rent (If let out for 12 months) 84 60 96 96
Loss due to vacancy 7 60 24 16
Unrealized rent Nil Nil Nil Nil

Actual Rent (for let out period) 77 Nil 72 88
Calculation of Gross Annual Value
Step 1: Expected Rent 70 55 85 125

Step 2: If actual rent is more than Expected Rent than
Actual rent otherwise expected Rent 77 N.A. N.A. N.A.
Step 3: If property remains vacant then decline due to
vacancy shall be considered 40 0 72 109
Gross annual value 70 0 72 109

Self Assessment

Fill in the blanks:
15. The basis of calculating Income from House property is the…………………….
16. The actual rent is …………………the reasonable rent the latter will be the annual value.

17. …………………………..is the most important factor in determining the annual value of a
let out house property.

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