PROVISIONS FOR ARREARS OF RENT AND UNREALIZED RENT RECEIVED SUBSEQUENTLY

PROVISION FOR ARREARS OF RENT AND UNREALIZED RENT RECEIVED SUBSEQUENTLY

[SECTION 25A]

(1) As per section 25A(1), the amount of rent received in arrears from a tenant or the amount of
unrealised rent realised subsequently from a tenant by an assessee shall be deemed to be
income from house property in the financial year in which such rent is received or realised,
and shall be included in the total income of the assessee under the head “Income from house
property”, whether the assessee is the owner of the property or not in that financial year.

(2) Section 25A(2) provides a deduction of 30% of arrears of rent or unrealised rent realised
subsequently by the assessee.

(3) Summary: Section 25A

Arrears of Rent / Unrealised Rent

(i) Taxable in the year of receipt/realisation

(ii) Deduction@30% of rent received/realised

(iii) Taxable even if assessee is not the owner of the property in the financial year of
receipt/realisation.