Income From House Property

This query is : Resolved

S Menon (Querist)
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09 October 2009 Sir/Madam,

When unrealized rent for previous years is received during the year the same will be taxed in the current year, right?(U/S 25AA. Also when arrears of rent received during the current year, the same will be taxed in the year of receipt(Sec 25B).

My doubt is why the law is giving the benefit of 30% deduction only to arrears of rent, because when we look at the character of these two incomes its somewhat similar, as both have not been taxed in any of the previous years.

Kindly give me the logic behind this?

Thanks

M Prabhakar Menon

M Prabhakar Menon (Expert)
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10 October 2009 in these matters it is better to follow the accrual method instead of the cash basis of accounting so that confusion can be avoided This practice is also accepted by the IT dept