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Sequence the steps for computing gross annual value of income from house property: (A) Find out the rent actually received or receivable after excluding unrealised rent before deducting loss due to vacancy. (B) Find out the loss because of vacancy. (C) Find out the reasonable expected rent of the property. (D) Find out which one is the higher amount computed in (C) or (A). (E) (D) - (B) is gross annual value Choose the correct answer from the options given below:

Sequence the steps for computing gross annual value of income from house property: (A) Find out the rent actually received or receivable after excluding unrealised rent before deducting loss due to vacancy. (B) Find out the loss because of vacancy. (C) Find out the reasonable expected rent of the property. (D) Find out which one is the higher amount computed in (C) or (A). (E) (D) - (B) is gross annual value Choose the correct answer from the options given below: Correct Answer (C), (A), (D), (B), (E)

The correct answer is (C), (A), (D), (B), (E)

Key Points Income from house property:

The rent earned from the house property that is taxed is included in the income from house property. In the event that the property is not rented out, the owner may be required to pay tax on 'deemed rent.'

The income from house property is added/ included in a person's (the assessee)' gross total income only if it satisfies three essential conditions:

  • The assessee is the owner of that property.
  • The property must consist of house, buildings and/or land.
  • The property may be used for any purpose except used by the owner for the purpose of running his business or profession.

Important Points Gross Annual Value:

The gross annual value of a property is the amount for which it may be expected to be rented from year to year. It's more like a deemed rent that could have been earned if the house had been rented out. The notional rent or considered rent receivable is taxable even if the property is not rented out.

Determine the Gross Annual Value:

Step 1 - Find out reasonable expected rent of the property

Step 2 - calculate the rent actually collected or receivable After deducting unrealized rent but before deducting vacancy loss.

Step 3 - Find out which one is higher—amount computed in Step-1 or Step-2.

Step 4 - Find out loss because of vacancy

Step 5 - Step-3 minus Step-4 is Gross Annual Value

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