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income from house property

Babitha (CA FINAL) (107 Points)

10 December 2009

whats the difference between unrealised rent and arrears of rent ?

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5 Replies

Deeps (Article Assisstant) (2485 Points)
Replied 10 December 2009

Unrealised rent [Section 25AA]	Arrears of rent [Section 25B]
(a) Taxable in the hands of the assessee whether	Taxable in the hands of the assessee
he is the owner of that property or not.	whether he is the owner of that
	property or not.
(b) Taxable as income of the previous year in	Taxable as income of the year in
which he recovers the unrealized rent.	which he receives the arrears of rent.
(c) No deduction shall be allowed.	30% of the amount of arrears shall be
	allowed as deduction.
(d) Unrealised rent means the rent which has	Arrears of rent is in respect of rent
been deducted from actual rent in any	not charged to income-tax for any
previous year for determining annual value.	previous year.

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Hareesh H Sharma (Cleared IPCC..now article) (894 Points)
Replied 10 December 2009

Unrealized rent is the amount which cant be realized from the tenant...Its treatment depends upon rule 4...

For arrears of rent i can give u an example...The owner asks the tenant which is a brach office to increase the rent..The branch office wants to seek the permission of HO for such increase..They get such permission during next FY and agree to pay the amount retrospectively ie from prev FY..So what we get in this year relating to last FY (the increased portion of rent relating to prev FY) is arrears of rent..

I am sorry i dont have a definition as such..I hope u understand it..