Computation of GAV

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hi, while going thru my PCC TN Manoharan book i came across que. from MAY 97 in which a person is residing in his house and due to tfr to other place he could not reside so gives it for rent on 3k per month for 9 months so acc. to me the GAV shud be higher of actual rent and expected rent which wud be 27000and36000 respectively,,, and thus for computation 36000 shud be taken but in the solution 27000 is given can anybody help me out in this regards..

Thanks in advance

Replies (9)

how much is the standard  rent  given in question

Hi ritu.... i think u r getting it all wrong..... When the actual rent is less than expected rent DUE TO vacancy, we take actual rent as GAV

as in there is no vacancy, shdnt it be 36000

Hi Ritu,

In case of HP which is LOP for part of year & SOP for other part of year

GAV is higher of Actual rent received or Expected rent (ie reasonable lettable value RLV)

Hence , in absence of info related to RLV, Actual rent received is assumed to be higher of two

Ans .Rs. 27,000

Hiiii Ritu

in the promblem asked by u rule of substitution will be applied while calculating the GAV

which means if the Actual rent is lower than expected rent then "Actual Rent will be taken as GAV"

therefore steps for calculating GAV wil be

Step 1) Reasonable rent i.e.

              Higher of Gross Municipal Value And Fair Rent

             Subject to maximum of Standard Rent

Step 2) Actual Rent i.e

              Actual Rent Recievable - Unrealised Rent

Step 3) GAV higher of Step 1 & Step 2 ( in normal case)

Step 4) Rule of Substitution (Relevant in your case)

             If step 2 is less than Step 1 due to vaccancy period then step 2 shall be treated as GAV

             NOTE:- Rule of Substitution WILL NOT APPLICABLE IF STEP 2 IS ALREADY HIGHER THAN   STEP 1.

  

              

Dear Ritu........

Please elaborate interms of Municipal Valuation, Fair Rent, Actual Rent (Rent received) and Standard Rent.........

guys in that que. nothing is given except the actual rent and for better presentation the actual rent shud b taken as base to calculate the faie rental value ,, right? and in that case fair rent wud bcum GAV ... Correct me if m wrong friends ,, and also that there is no vacancy that time owner had occupied it(Que from May 97 PE-2)

friends in my opinion this is not the case of vacany but the case is of PLO/PSO if any one can refer than do refer any compilation or suggested of MAY 97 i have seen this in my book TN Manoharan


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