Negative NAV of Let Out House

Hello everyone,

In case of a let out House Property, if the Municipal Taxes are more than the Gross Annual Value (GAV), can the Net annual value be negative? And can the negative amount be set off against other heads of Income? I referred the Act and it was silent about this matter. The Act only says that the annual value of 1 self occupied property is "NIL".  

Assume for example that the Rent Received is Rs 90,000 and Municipal taxes paid is Rs 100,000 (including arrears of Municipal Taxes) can the loss of Rs 10,000 be set off against other heads of income?

Thank You for your time.

Replies (3)

municipal taxes can not go above the rent, if the same has been happened then the "fair rent value" has been taken by municipal corpn, same method will apply in IT also.

'Fair rent' means how much rent a similar house in the same locality fetches right? If an assessee pays taxes of say 10 years together with interest and if the property taxes are high enough there is a chance that the Taxes paid are even higher than the Municipal Value, Fair rent, standard rent and rent received which we take into account while computing GAV. Assume that there is can actual case of this happening, what is the correct treatment?

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