GROSS ANNUAL VALUE

   

1) Gross Annual Value  

Computation I: Calculation of Reasonable expected rent of the property, which equals Municipal value or fair rent whichever is higher, subject to limit of Standard rent as per Rent Control Act. 

Computation II: Calculation of Actual Rent received or receivable after deducting Unrealized Rent & Rent of the period for which Property remained vacant. 

Computation III: This step becomes applicable only on satisfaction of following conditions:

  • The property is vacant for any part in the previous year.

  • Actual Rent received/ receivable as calculated in Step 2 is lower than the Reasonable expected rent.

  • Such lowering of rent receivable compared to reasonable expected rent is only because of property remaining vacant during the year. 

The above computations give rise to Four situations summarized below:

Situation

Gross Annual Value (G.A.V)

  1. If Computation III does not become applicable in case of no loss on vacancy

Higher of the amount amongst Computation I or Computation II equals G.A.V

  1. Rent calculated  under Step II is lower than Reasonable expected rent only because of VACANCY

Step II Calculation, i.e., Rent received/ receivable equals G.A.V

  1. Rent calculated  under Step II is lower than Reasonable expected rent partly because of VACANCY & partly because of OTHER FACTORS

Reasonable Expected Rent minus loss due to vacancy equals G.A.V

  1. Rent calculated  under Step II is lower than Reasonable expected rent only because of OTHER FACTORS

Step II & Step III both become not Applicable and hence Rent calculated under Step I equals G.A.V

 

PLEASE NOTE:

  • OTHER FACTORS is defined to include here Loss suffered on account of Unrealized rent or cases where Annual Rent Receivable on a property is itself lower than the figures arrived at under Computation I".

  • Refer Illustrations for more clarity on procedural aspect of computing GAV.

Click Here For Illustration