Income from House Property for CFP – 3

GAV when Vacancy Period and no Unrealized Rent:

Step 1 and 2 are same as we did earlier

GAV when Unrealized Rent and No Vacancy:

Unrealized rent shall be excluded from rent received if

Condition 1	The tenancy is bona fide
Condition 2	The defaulting tenant has vacated, or steps have been taken to compel him to vacate the property
Condition 3	The defaulting tenant is not in occupation of any other property of the assessee
Condition 4	The assessee has taken all reasonable steps for the recovery of the rent

Step 1 and 2 are same

Step 3

GAV = Higher of AR (AR for the year-Unrealized Rent) or 2

Illustration:

Ram has a house property whose Municipal Valuation is Rs.140000 whereas the fair rent of the house is Rs.160000 and Standard Rent is Rs.145000. Rakesh has paid municipal taxes of Rs.14000. Based on the above data, answer the following: If the annual rent of property is Rs.180000 and Unrealized Rent is Rs.60000, the GAV is_____________.

1. 145000
2. 180000
3. 120000
4. 131000

GAV When there is Vacancy Period and Unrealized Rent

 Step 1 and 2 are same

Step-3

GAV higher of AR (AR for the period of let out – unrealized rent) or 2

If AR is less than 2, 2 – loss for vacancy

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