House property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 November 2011 when an amount is received as arrears of rent related to past p.y. it is taxable in the year in the year in which the amt. is received subject to a standard deduction of 30%
but when an amount is recd. as unrealised related to past p.y. it is not provided benefit of std. deduction why it is so ?????????

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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06 November 2011 In case of Unrealised Rent (UR) it can't always be said that 30% Deduction is not allowed.
Whereever Reasonable Expected Rent is higher
than the Actual Rent, we can consider RER as Gross Annual Value and can claim 30% deduction on that.
Illustration --
Municipal Valuation 150000
Fair Rent 250000
RER 250000
..
Monthly Rent 30000...
UR...6 months ..180000
Actual Rent ...... 180000
...
GAV ... 250000
SD @ 30% 75000
...
So here you may see that 30% Deduction has been allowed on 250000/- and UR received
later to the extent of Rs. (250000-180000)=70000 had already enjoyed the SD benefit.

Due to this reason only , it has been provided that on UR 30% SD can not be claimed.

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Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2011 should we follow the same procedure in case of arrears of rent is recd.

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CA VISHAL RANA,CS,B.Com,AMFI

CA VISHAL RANA,CS,B.Com,AMFI (Expert)
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09 November 2011 no same procedure require to be follow in case of arrears of rent recived because standard deduction from arrers of rent will be available...because S.D not taken earlier...as said by the paras sir above standard deduction will be available if benefit of S.D not taken earlier.

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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09 November 2011 There is a Basic Difference in the arrears and Unrealised Rent with a basic Similarity.
.
Similarity-The Receipts of both are uncertain
and assessee rejoice in both the cases on the receipt.
.
Difference:
In case of arrears, recomputation of earlier's Income from HP is not done and is treated as an extra rent of the current PY.
.
Whereas in case of Unrealised Rent,
Recomputation of income of the respective year to which the UR is related, has to be made. Suppose UR is related with AY 2009-10, then income of AY 2009-10 will be recomputed.
.

On recomputation of AY 2009-10.... Due to the addition of UR if IFHP increases then the income earlier returned, the difference only is added in the NAV of current PY.
.
On arrears SD @ 30% is allowable, on the UR Portion, it is not allowed.

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Querist : Anonymous

Querist : Anonymous (Querist)

05 January 2012 thanks sir