House property

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amit nagpal (Querist)
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10 September 2013 please tell me what is the treatment for gross annual valueif a property is self occupied,let out& vacant in a same year

CA Pallav Singhania

CA Pallav Singhania (Expert)
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10 September 2013 Computation of Annual Value:

The Gross Annual Value (G.A.V.) is the highest of

Rent received or receivable
Fair Market Value.
Municipal valuation.

(If however, the Rent Control Act is applicable, the G.A.V. is the standard rent or rent received, whichever is higher).

It may be noted that if the let out property was vacant for whole or any part of the previous year and owing to such vacancy the actual rent received or receivable is less than the sum referred to in clause (a) above,

then the amount actually received/receivable shall be taken into account while computing the G.A.V. If any portion of the rent is unrealisable, (condition of unrealisability of rent are laid down in Rule 4 of I.T. Rules) then the same shall not be included in the actual rent received/receivable while computing the G.A.V.

Net Annual Value (N.A.V.) is the GAV less the municipal taxes paid by the owner, provided the taxes were paid during the year.

Annual Value is the N.A.V. less the deductions available u/s 24

CA Pallav Singhania

CA Pallav Singhania (Expert)
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10 September 2013 Deductions available under Section 24:

A sum equal to 30% of the annual value as computed above.

Interest on money borrowed for acquisition/ construction/ repair/ renovation of property is deductible on accrual basis.

Interest paid during the pre construction/acquisition period will be allowed in five successive financial years starting with the financial year in which construction/acquisition is completed subject to the following:

The amount of deduction shall not exceed Rs. 30000/-.

Where the propertyis acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and acquisition or construction is completed within three years from the end of the financial year in which capital was borrowed, the amount of deduction shall not exceed Rs. 150000/-.

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