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| Computation of gross rental value under Section 37(ITA-2023) |
Computation of gross rental value under Section 37 | Bangladesh Income Tax Act -2023:
As per section-37 of ITA-2023,
Computation of Gross Rental Value:
(1) For House Property:
The gross rental value of a house property owned by a person during an income year shall be calculated using the following formula:
A = (B + C + D + E) − F
Where:
- A = Gross rental value
- B = The higher of the following:
- (i) Rent accrued from the house property, or
- (ii) Annual value of the house property
- C = The portion of any adjustable advance received as house rent that is adjusted during the income year
- Note: Unadjustable advance or security deposit shall not be included
- D = Any additional amount or monetary benefit received for the use of the property during the year, excluding salami or premium, and in addition to amounts in B or C
- E = Any service charges, repair and maintenance fees, or other payments made by the tenant, regardless of their designation
- F = Vacancy allowance, allowed upon submission of an electricity bill
(2) For Property Other Than House Property:
The gross rental value of any property other than a house property shall be computed using the following formula:
A = (B + C + D)
Where:
- A = Gross rental value
- B = The higher of the following:
- (i) Rent accrued from the property, or
- (ii) Annual value of the property
- C = The portion of any adjustable advance received as rent that is adjusted during the income year
- Note: Unadjustable advance or security deposit shall not be included
- D = Income earned from any other use of the property, including any additional monetary benefits received beyond amounts in B or C
Free Asked Question(FAQ):
1. What is gross rental value under Section 37 in Bangladesh?
Gross rental value is the total annual rent a property can generate, as defined under Section 37 of the Bangladesh Income Tax Act 2023.
2. How is gross rental value calculated in Bangladesh?
It is calculated based on actual rent received or receivable, or the reasonable expected rent if the property is vacant or underreported.
3. What factors affect gross rental value computation?
Factors include location, property condition, municipal valuation, fair market rent, and actual rental income.
4. Is municipal value considered in gross rental value?
Yes, municipal valuation may be considered as a benchmark when determining expected rental value.
5. What happens if no rent is received from a property?
If no rent is received, the tax authority may assess a reasonable expected rental value for taxation purposes.
6. Why is gross rental value important for income tax?
It determines taxable income under the “Income from House Property” head and affects overall tax liability