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Guide on Section 23 of Income Tax Act - Arrears of rent and unrealised rent received subsequently

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Last Updated: 01-04-2026

23.1 Arrears of rent and unrealised rent received subsequently

Section 23(1)

Arrears of rent or unrealised rent received or realised subsequently from a tenant,

shall be deemed to be the income from house property

in respect of the tax year in which such rent is received or realised.

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30% of the annual value is a flat deduction and is allowed irrespective of the actual expenditure incurred.

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Interest relating to the year of completion of construction/ acquisition of property

can be fully claimed in that year irrespective of the date of completion/ acquisition.

 

23.1.1 Arrears of rent and unrealised rent shall be included in Income of Assessee

Section 23(2)

Deemed income u/ss (1)

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 tax year.

 

23.1.1 Deduction of 30% of arrear or rent/ unrealised rent

Section 23(3)

30% of the arrears of rent or unrealised rent referred to in sub-section (1)

shall be allowed as deduction