How do we show a commercial property not let out in the last financial year in IT returns?

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Quick Summary

If your commercial property was vacant and earned no rent last financial year, you do not need to declare a notional rent or annual value in your IT returns. Unlike residential properties, commercial properties are taxed solely on actual rent received. Any municipal taxes or maintenance paid during the vacancy period are not deductible if there's no rental income.

KV Venkateswaran

KV Venkateswaran (Querist)

05 September 2025 I have one self occupied residential property. I also have one commercial property an office space which I was unable to rent last financial year but I paid municipal taxes and also maintenance charges to the society .

Do I show this commercial property as deemed to be let out and show fair rent as annual value though I have not received any rent in the last financial year and show it in income from house property?
Thanks.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

05 September 2025 For a vacant commercial property not earning rent, there is no need to declare fair (notional) rent or annual value. Only self-occupied residential properties after the permitted limit are deemed to be let out.
Commercial properties (shops, offices, etc.) are always taxed based on actual rent received or receivable.
If a commercial property is vacant and not earning any rent, there is no requirement to show notional (fair) rent as annual value, unless it was let out in part of the year and vacant due to genuine reasons.
Municipal taxes and maintenance charges paid for the commercial property in the vacant period are allowable as deductions only if there is gross annual value (i.e., if there is rental income)—if Gross Annual Value is zero due to vacancy, deductions do not arise.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

20 September 2025 Good Luck..

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