Hi What is the basic difference between arrears of rent as covered by sec 25B and unrealised rent reffered to in sec 25AA of income tax act Further when sec 25A is applicable and when sec 25AA.i have read both but both sounds akin Thanks in advance
3 Replies
CA Chaitanya
(PRACTISING CA)
(4283 Points)
Replied 09 November 2008
They look similar but they have the followig difference.
1. Arrears of rent is the rent received during the previous year on account of increase in rent with restrospective effect whereas unrealised rent is the rent which the owner is not able to collect it from the tenant and was able to realise in the subsequent year.
2.Standard deduction is available to the arrears of rent and no deduction is available to unrealised rent.
AMIT GUPTA
(CHARTERED ACCOUNTANT)
(70 Points)
Replied 10 November 2008
SEC. 25A;;RECOVERY OF unrealised rent in relation to previous years preceeding PY-2002-03...
DEDUCTION ALLOWED=RENT RCOVERED+DEDUCTION ALLOWED EARLIER -ACTUAL UNREALISED RENT
SEC 25AA:RECOVERY OF unrealised in rent relation to previous year 2002-03 AND AFTER THAT...
NO DEDUCTION ALLOWED.,.
PRANAV MISHRA
(CA Final student)
(573 Points)
Replied 10 November 2008
Thanks
This indicates that Sec25A is almost inoperative unless and untill the unrealised rent relates to PY 2002-03 or before
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