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GAV for property with vacancy

Hareesh H Sharma (Cleared IPCC..now article) (894 Points)

26 October 2009

If a house property was occupied for 8 months say from 1/4/08 to 1/8/08 for 5000 rs per month and from 1/12/09 to 1/4/09 for 7500 per month and subsequently the selected value of Municipal value Standard rent and fair rent works out to be higher than actual rent of 50,000 (5000*4 + 7500*4). So to check out with selected value for reasons due to vacany or not which rent will be taken for the vacant 4 months..whether 4*5000 or 4*7500????

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7 Replies

Sandeep Pandey (CA FINAL) (1306 Points)
Replied 27 October 2009

5000/- should be taken for vacancy period.............................

praveen (Chartered Accountant) (6971 Points)
Replied 27 October 2009

yeah 5000 has to be charged.

Deeps (Article Assisstant) (2485 Points)
Replied 27 October 2009

Yeas, Rs. 5000/- should be taken as vacancy period rent and calculated accordingly...

Gaurav Raichura (CA-Final Student) (82 Points)
Replied 27 October 2009

In this case, Rs. 5000/- should be considered as rent for vacant period because up to 01/08/2008 he has let out the property @ 5000/- and the assessee doesn't know whether he can receive more than 5000 or not. Further, upto the date when vacancy period starts, last rent received or receivable per month is Rs. 5000/-. Only after 01/12/2008, assesee received Rs. 7500/- per month.

So, as per my opinion, Rs. 5000/- should be considered as monthly rent for vacancy period.

(Guest)

Yes Rs. 5000/- should taken as the monthly rent of the vacant period.....

Hareesh H Sharma (Cleared IPCC..now article) (894 Points)
Replied 27 October 2009

tanx exery1...glad that every1 share the same view...

saranraj (CA FINAL) (419 Points)
Replied 27 October 2009

In order to reduce tax burden, you can also take Rs.7500 as rent during vacancy period and satisfy the assessing officer that the vacancy occured only due to upward revision of rent.