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CS Executive · Tax Laws and Practice · Income under the Head House Property

Mrs. Iyer sold her let-out flat in an earlier tax year. In the current tax year she receives Rs. 1,00,000 as arrears of rent for that flat from the former tenant. Under the Income-tax Act, 2025, what is the amount chargeable as income from house property for the current tax year?

Rs. 70,000 is chargeable. Section 23 taxes arrears of rent in the year of receipt even if the assessee no longer owns the property, and allows a deduction of 30% of the arrears, so Rs. 1,00,000 less Rs. 30,000 gives Rs. 70,000.

  1. ARs. 1,00,000 because she is no longer the owner
  2. BNil because she is no longer the owner
  3. CRs. 70,000Correct
  4. DRs. 30,000

Explanation

Section 23 deems arrears of rent received to be income from house property in the year of receipt, whether or not the assessee is still owner. A deduction of 30% (Rs. 30,000) is allowed, leaving Rs. 70,000. Rs. 1,00,000 ignores the deduction; Nil ignores section 23(2).

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