India Budget Series


Unrealised rent and arrears of rent under the existing provisions are spread across various Section 25A, 25AA and 25B, wherein the computation mechanism differs under different sections.

It is proposed to merge the above sections to a single Section 25A with the proposal that amount of rent received in arrears or unrealised rent received subsequently shall be charged to income tax in which such rent is received or realised, irrespective of the fact that whether the assessee is owner of property or not in that financial year.

It is further proposed that 30% of the arrears of rent or unrealised rent realised subsequently shall be allowed as standard deduction against such receipts.

However the provisions may prove to be unfair to an assessee who has been taxed on fair rental value which was in excess of actual rent.

This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-18 and subsequent assessment years



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