Unrealised Rent will Not Added with Rental Income For You
In case you are unable to recover the rent which is due for financial year then you will be liable to pay income tax only in respect of such rent which has actually been received by you. This is because of the fact that Section-23 provides that rental income would be taxed on the basis of rent actually received. Thus, if you have not received any rent for a particular period during the accounting year, then such accrued amount of rental income or the unrealised portion of the rental income or the rent for the vacant portion will not be added in your rental income.
As a result of this provision of the law, it is clear that the law realises the concept of actual income when the investor actually has not received the rent for a particular period because there is no logic of taxing such rental income which in fact has not been received by the tax payer.
Thus, it is only the rent which is actually received by you which would be subjected to tax while computing your income from house property and not that portion of the rental income which has actually not been received by you.
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