House property

Hello ,

Arrears of rent -

If an assesse receives any amount on account of arrears of rent which is not charged to tax in any previous years, then the amount so received after deducting 30% as standard deduction under section 24a is taxable in the year of receipt.

Such amount is taxable whether the assesse is the owner of that property in the year of receipt or not.

It means that rent pertaining to prior years received in the current year. It could be due to reasons like "Increase in rent with retrospective effect"

Unrealise rent: Means the Rent which not able to realised by the landlord due to the default by the Tenant.

When the assessee cannot realise rent from a house property and the assessee has realised any amount in respect of such rent in any subsequent years,  then such income shall be deemed to be the income from house property, in the year of receipt.

When the assessee cannot realise rent from a house property and the assessee has realised any amount in respect of such rent in any subsequent years,  then such income shall be deemed to be the income from house property, in the year of receipt.

Unrealised rent means rent which could not be realised due to unavoidable reason like absconding by tenant etc. I.e steps were taken to vacate the property and legal proceedings were initiated to recover the rent.

Whereas,

Arrears of rent means rent which are due as a reason for increase in rent remaining unpaid by the tenant. 

The difference between the two is one is a result of legal proceedings whereas other is just dues remaining unpaid

However tax calculation in both case is different.

In case of unrealised rent recovered, entire amt is taxable whereas in case of arrears of rent, 30% standard deduction is allowed