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House property in income tax

Anchal Sharma (88 Points)

24 October 2022

how to determine net annual value of self occupied and let out house ...

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rama krishnan (12239 Points)
Replied 25 October 2022

Computation of Gross Annual Value Step 1: Calculate reasonable expected rent (RER) of the property being higher of the following:
a) Gross Municipal Value.
b) Fair Rent of the property.
Note: RER cannot exceed Standard Rent. * Reasonable Expected Rent (RER) is also known as Annual Letting Value (ALV).

Step 2: Calculate Actual Rent Received or Receivable (ARR) for the year less current year unrealised rent (UR) subject to certain conditions#. #Unrealised Rent [Rule 4]: Unrealised Rent of current year shall be deducted in full from Actual Rent Receivable, provided the following conditions are satisfied:
(i) The tenancy is bona fide;
(ii) The defaulting tenant has vacated the property or steps have been taken to compel him to vacate the property; (iii) The defaulting tenant is not in occupation of any other property of the assessee;
(iv) The assessee has taken all reasonable steps to institute legal proceeding for the recovery of the unpaid rent or has satisfied the Assessing Officer that legal proceedings would be worthless.

Step 3: Compare the values calculated in step 1 and step 2 and take the higher one.

Step 4: Where there is vacancy and owing to such vacancy the ‘ARR – UR’ is less than the RER, then ‘ARR – UR’ computed in step 2 will be treated as GAV.

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