Final answer:
The annual value of the house property is typically the highest of the municipal value, fair rent, standard rent, or the actual rent received. In this scenario, it would be Rs.16,800, the actual rent received for the property throughout the previous year.
Step-by-step explanation:
The annual value of the house property can be determined by considering elements such as municipal value, fair rent, standard rent, actual rent, and unrealized rent. As per taxation laws in many jurisdictions, the higher of the municipal value, fair rent, or standard rent is usually chosen, unless the actual rent received is higher and there's no unrealized rent.
In this case, the highest of the municipal value (Rs.14,000), fair rent (Rs.14,500), and standard rent (Rs.14,200) is Rs.14,500. However, since the actual rent received is Rs.16,800, this would typically be considered even after deducting the unrealized rent (Rs.7,000), except for one consideration.
If the unrealized rent was not due to tenant default, it may not be subtracted, thus the actual rent remains Rs.16,800, making it the highest figure. If we don't consider unrealized rent, the answer would be Rs.16,800 (c), which represents the actual rent for an occupied property throughout the previous year, assuming full collection.