Q.Mr. Sen owns a house which was let out throughout the previous year 2025-26. From the following particulars, compute his Income from House Property for Assessment Year 2026-27:
Municipal Value ₹2,40,000; Fair Rent ₹2,60,000; Standard Rent ₹2,50,000; Actual Rent Received ₹2,75,000; Municipal Taxes paid by Mr. Sen during the year ₹15,000; Interest on loan taken for construction of the house (relating to the current year only) ₹90,000.

With the property let out for the full year and actual rent exceeding Expected Rent, Gross Annual Value is simply the Actual Rent Received.

Step 1 — Expected Rent: higher of Municipal Value (₹2,40,000) and Fair Rent (₹2,60,000) = ₹2,60,000, restricted to Standard Rent ₹2,50,000 → Expected Rent = ₹2,50,000.

Step 2 — Gross Annual Value: the property was let out throughout the year with no vacancy, and Actual Rent Received (₹2,75,000) exceeds Expected Rent (₹2,50,000), so under Section 23(1)(b), GAV = ₹2,75,000.

A common error is taking GAV as the Expected Rent (₹2,50,000) instead of the higher Actual Rent Received (₹2,75,000) — whenever the property is let out for the whole year with no vacancy, Section 23(1)( …