Annual Value - (New) Section 21 / (Old) Section 23

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....x year   • If property is let or any part of it is let   • It remained vacant for part or whole of the year • Due to vacancy, actual rent is less than expected rent Annual Value = Actual Rent (lower amount) Sub-section (3): Deduction of Taxes levied by a local Authority in respect of such property • Taxes levied by local authority (e.g., municipal/property tax, service tax) • Must be actually paid during the year • Payment timing matters, not accrual Sub-section (4): Unrealised Rent • Rent which cannot be realised by the owner shall not be included in computing the actual rent received or receivable • ....

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.... only to 2 houses • Assessee must choose/specify them • (b) Self-occupied benefit NOT allowed if: • Property is actually let out anytime during the year • Owner derives any other benefit (e.g., commercial use, indirect income) Under Income Tax Act, 1961 [ Upto 31.03.2026 ] Section 23(1):- General rule for determining the annual value of property ANNUAL VALUE : Annual Value shall be the sum for any property might reasonably be expected to be let from year to year. It may neither be the actual rent derived nor the municipal valuation of property. It is something like notional rent which could have been derived, had the property been let. In determining the annual value the....

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....eduction for Municipal Taxes is subject to following two conditions: • It should be borne (paid) by the assessee and • It should be actually paid during the previous year. As per Explanation to Section 23(1) but subject to rules For the purpose of Section 23(1)(b) & 23(1)(c) Amount of Actual Rent Received / Receivable by the owner (ARRR) shall not include the amount of rent which the owner cannot realise i.e. Unrealised Rent Rule 4: Conditions for Unrealised Rent • The tenant must be bonafide. • The tenant should have vacated the property or reasonable steps should have been taken to evict him. • The tenant should not be in occupation of any other property of the asse....