FACTOR TO BE CONSIDERED WHILE DETERMINING THE ANNUAL VALUE OF HOUSE PROPERTY

1. Actual Rent(AR) - It is an amount of rent received by the owner from the tenant in relation to house property
2. Annual Rental Value(ARV) – it is the gross annual value
3. Fair Rent (FRV) – it refers to the rent charged on similar types of property located the same locality
4. Municipal Rent (MRV) – it is the annual rental value of the house property fixed by the municipality
5. Standard Rent (SRV) - it refers to the rent fixed or determinable under the Rent Control Act
6. Real Rental Value (RRV) - real rental value is the amount after deducting expenses relating to common facilities from the actual rent by the owner.
7. Expected Rental Value (ERV) – it is the notional rent or reasonable rent


Determination of Gross Annual Value (GAV)

A) GAV of let out House property

Expected rental value (ERV) or Actual rental value (ARV) received for the full year whichever is higher will be the GAV. If the property subject to rent control act,

FRV or MRV whichever is higher and compare the result with SRV, take the lesser one as GAV

If the let out property vacant for a full year the GAV is nil otherwise if it vacant for 2 or more months only ,then deduct the loss due to vacancy out of the total GAV.

B) GAV of Deemed to Be Let Out

ie if a person using more than one his own house for his own occupation, then treat one as self occupied but other houses will be considered as deemed to be let out. So here also calculating GAV like the GAV of let out property

b) Gross annual value of self occupied house property

Here GAV is nil


Briefly in case of let out property, income will be Fair Annual Value or Actual Rent Received whichever is more. However, if property is let-out only for part of the year or not let out, income will be Fair Annual Value or Actual Rent Received whichever is less.