Substitution of new section for sections 25A, 25AA and 25B.
11. For sections 25A, 25AA and 25B of the Income-tax Act, the following section shall be substituted with effect from the 1st day of April, 2017, namely:-
Special provision for arrears of rent and unrealised rent received subsequently.
‘25A. (1) The amount of arrears of rent received from a tenant or the unrealised rent realised subsequently from a tenant, as the case may be, by an assessee shall be deemed to be the income from house property in respect of 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) A sum equal to thirty per cent. of the arrears of rent or the unrealised rent referred to in sub-section (1) shall be allowed as deduction.’.
Notes on Clauses:
Clause 11 of the Bill seeks to substitute sections 25A, 25AA and 25B of the Income-tax Act relating to special provisions for cases where unrealised rent allowed as deduction is realised subsequently, unrealised rent received subsequently to be charged to income tax and special provision for arrears of rent received, with a new section 25A.
It is proposed to provide that the amount of rent received in arrears or the amount of unrealised rent realised subsequently by an assessee shall be charged to income-tax in the financial year in which such rent is received or realised, whether the assessee is the owner of the property or not in that financial year.
It is also proposed that thirty per cent. of the arrears of rent or the unrealised rent realised subsequently by the assessee shall be allowed as deduction.
This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years.
