FIXATION OF RENT
Capitalized value of the property can be known by any of the methods discussed earlier and suitable value of year's purchase is adopted according to the admissible rate of interest (8% or any other fair rate). Then,
Net income = capitalized value / year's purchase
All possible outgoings are added to this net income which will give gross income from the property. Gross income or gross rent = Net rent + outgoings
The standard rent = (Gross Income / 12) per month.
CALCULAITON OF STANDARD REND OF A GOVT. PROPERTY
(In Punjab / Haryana), standard rent is calculated on the capital cost of the residence and shall be either:
1. (a) A percentage equal to the rate of interest on the capital ( which includes the cost on sanitary, water supply and electrical installation, fencing, boundary walls and service roads etc. as fixed from time to time) value of a building. In addition, municipal and other taxes and the expenditure for the maintenance of building are also realised, or
(b) 6%per annum of the capital value of a building constructed/ occupied after 1992 whichever is less.
2. Municipal taxes etc. levied on the occupant will be payable to the occupant direct to the authorities concerned in addition to the above rent calculations.
Generally the value of the land is excluded. If value of land to be considered a little less percentage says 1 to 2 % on value of land be taken for calculation of standard rent.