I have leased my Vacant land to a BPCL. The lease expired in Sept 2017, but BPCL continued paying the old rent (X). The new agreement with increased rent (Y) was signed in June 2018. BPCL paid the arrear rent (Y-X) for the period Oct'17 to June'18 in June 2018. The TDS was also deducted in the FY 2018-19. Since this income will be under the head "Income From Other Sources" , can I follow accrual system and show the increased rent (Y) for the period Oct'17 to Mar'18 while filing returns in AY 2018-2019? Will this be a issue because the TDS was deducted only in FY 18-19, but i will be showing the rental income in FY 17-18?
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Taxation of rental arrears
Replies (4)
Income chargeable to tax under the head “Income from other sources” is to be
computed in accordance with the method of accounting regularly employed by the
assessee. Hence, if the assessee follows mercantile system, then income will be
computed on accrual basis. If assessee follows cash system, then income will be
computed on cash basis. However, method of accounting does not affect the basis
of charge in case of dividend income and income by way of interest received on
compensation or on enhanced compensation.
computed in accordance with the method of accounting regularly employed by the
assessee. Hence, if the assessee follows mercantile system, then income will be
computed on accrual basis. If assessee follows cash system, then income will be
computed on cash basis. However, method of accounting does not affect the basis
of charge in case of dividend income and income by way of interest received on
compensation or on enhanced compensation.
@ Prashanth.,
As per Your query, TDS deducted FY 18-19... Well.
What about Your filing ITR in FY 17-18...?
Are You show the Rental income Rs. Y or X FY 17-18...?
As per Your query, TDS deducted FY 18-19... Well.
What about Your filing ITR in FY 17-18...?
Are You show the Rental income Rs. Y or X FY 17-18...?
upto last A.Y year which system you are following marchantile or cash ? if marchantile then yes you have to show rewise rent and o/s rent to be shown accrued rent same of TDS
@ Raja P, In ITR filed for FY17-18, i have showed the old rent (X) as i was not aware. I wanted to check if i can file a revised return showing increased rent (Y) even thogh the TDS will be deducted only in FY 18-19.
@ Rahul, Till last AY, all the income accrued were received in the same yeat, so there was no difference. The FD interest was shown in accrual basis, so yes it was in mercantile system. I did not understand you last point about TDS.
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