Q.Mrs. Ghosh's house has a Municipal Value of ₹1,80,000, Fair Rent of ₹2,00,000, and Standard Rent of ₹1,90,000. It was let out at ₹18,000 per month for 10 months during the previous year 2025-26 and remained vacant for the remaining 2 months. She paid Municipal Taxes of ₹10,000 during the year, and paid interest of ₹60,000 on a loan taken for the house. Compute her Income from House Property for AY 2026-27.

Because the vacancy itself is what pulled the actual rent below Expected Rent, Gross Annual Value is taken at the lower, actually-realised figure.

Step 1 — Expected Rent (for the full year): higher of Municipal Value (₹1,80,000) and Fair Rent (₹2,00,000) = ₹2,00,000, restricted to Standard Rent ₹1,90,000 → Expected Rent = ₹1,90,000.

Step 2 — Actual Rent Received: ₹18,000 × 10 months let out = ₹1,80,000.

Step 3 — Gross Annual Value: the property was let out and vacant for part of the year, and the vacancy is exactly why Actual Rent (₹1,80,000) is less than Expected Rent (₹1,90,000) — so, under Section 23(1)(c), GAV = Actual Rent Received = ₹1,80,000, not the higher Expected Rent.

Students often still take GAV as the higher Expected Rent (₹1,90,000), forgetting that Section 23(1)(c) specifically overrides this WHEN the shortfall is caused by vacancy — GAV drops to the actual rent realised, it is never re-inflated bac …