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CA Intermediate · Taxation · Income from House Property

Mr. Gupta received arrears of rent of Rs 90,000 in tax year 2026-27 relating to an earlier year, which was not charged to tax before, and he is not the owner-occupier. How is it taxed?

Rs 63,000 is taxable in the year of receipt. Arrears of rent not charged earlier are taxed in the year received under house property income, with a flat 30% deduction allowed, so 70% of Rs 90,000 is taxed.

  1. ARs 90,000 taxed in full without any deduction
  2. BRs 63,000 after 30% deduction, taxed in the year of receiptCorrect
  3. CRs 90,000 taxed in the earlier year
  4. DNot taxable as it relates to an earlier year

Explanation

Arrears of rent not previously taxed are taxable in the year of receipt as income from house property, after a flat 30% deduction: 90,000 x 70% = 63,000. No other deduction is allowed.

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