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CA Intermediate · Taxation · Income from House Property

Mr. Arvind Nair owns a house property in Kochi let out for the whole of tax year 2026-27. Municipal value is Rs 3,00,000, fair rent is Rs 3,36,000, standard rent under the Rent Control Act is Rs 3,24,000, and actual rent received is Rs 3,60,000. Ignoring vacancy and municipal taxes, what is the Gross Annual Value (GAV)?

The GAV is Rs 3,60,000. Expected rent is the higher of municipal and fair value, limited to standard rent, giving Rs 3,24,000. Since actual rent received of Rs 3,60,000 is higher than expected rent, it becomes the gross annual value.

  1. ARs 3,00,000
  2. BRs 3,24,000
  3. CRs 3,36,000
  4. DRs 3,60,000Correct

Explanation

Expected rent = higher of municipal value (3,00,000) and fair rent (3,36,000) = 3,36,000, then capped at standard rent 3,24,000. Actual rent received is 3,60,000, which exceeds expected rent of 3,24,000. GAV is the higher of the two, i.e. 3,60,000. Choosing 3,24,000 ignores the comparison with actual rent.

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