It refers to the Rent which the landlord (owner) has not be able to realize

i.e. that Rent which the tenant has failed to pay


It is reduced from GAV along with Municipal Taxes as follows

Gross Annual Value XX
Municipal Taxes XX
Unrealized Rent XX
Net Asset Value XX


Unrealized Rent is allowed as deduction if the following condition are satisfied

  1. The tenancy is Bonafide

        (Rent agreement is  genuine)

  1. The tenant has vacated the property

        If the tenant has not vacated , than steps has been taken by land lord to Compel vacation (notice served on tenant )

  1. The tenant is not in occupation of any other property
  2. Legal proceedings has been started against the tenant for recovery or the owner has satisfied the A.O  that such legal proceedings would  be useless .




Q1 Calculate NAV 

Municipal Value 200000
Fair Rent 280000
Standard Rent 240000
Actual Rent Due 300000
(25000 PM*12)  
Actual Rent Paid by tenant 275000
(25000 PM*11)  
Tenant did not pay rent for last month
Municipal taxes paid by owner 6000


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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.