Comparison of Section 23 "Arrears of rent and unrealised rent received subsequently" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....rs receiving arrears or previously unrealised rent (and to tax authorities assessing such receipts). The texts are substantively the same in operative effect; minor drafting and descriptive differences between the Bill and the Act version are noted below. Effective date or commencement is: Not stated in the document. Background & Scope Statutory hooks: The item is denominated as Clause 23 in the Income Tax Bill, 2025 (old version) and as Section 23 in the Income-tax Act, 2025 [As Passed]. The provision falls under the head "Income from house property". It addresses two categories of receipts from tenants: (i) arrears of rent received by an assessee and (ii) unrealised rent that is realised subsequently from a tenant. The text treats such ....

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....s an intent to tax the recipient of the rent receipt on that basis notwithstanding formal ownership status in that year. The statutory instruction to allow 30% as deduction mirrors the standard municipal/ statutory allowance (commonly the standard deduction under the head "Income from house property"); the provision therefore treats such receipts in a manner consistent with routine computation of income from house property, subject to the one-line concession of a fixed 30% deduction. The legislative language is prescriptive and mechanical; no rule-making delegation, conditions, or qualifications are included in the text provided. Legislative policy reasons (e.g., anti-avoidance, revenue realisation, simplification) are: Not stated in the do....

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....s are mentioned in the documents. Interaction with other sections of the Income-tax Act (for example, provisions on computation of income from house property generally, or on assessments, time limits, or set-off) is: Not stated in the document. Any potential interaction with provisions dealing with taxation of receipts under other heads, or with transfer of property or agency relationships, is: Not stated in the document. Practical Implications * Compliance and risk areas: The provision creates a clear compliance obligation to include arrears/unrealised rent realised subsequently in the total income under the head "Income from house property" in the year of receipt/realisation, even where the recipient is not the owner that year. Taxpaye....

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....h matters are therefore not addressed in the documents. Differences between the provisions and practical impact of each change Comparison: The two texts are substantially identical in substantive operation. Differences are limited to minor drafting variations: * Drafting/wording: The Act (Section 23) begins "The amount of arrears of rent received by an assessee from a tenant, or the unrealised rent realised subsequently from a tenant, shall be deemed..." while the Bill (Clause 23) uses "The amount of arrears of rent received from a tenant or the unrealised rent realised subsequently from a tenant shall deemed to be..." (the Bill text appears to contain a typographical omission of "be"). * Practical impact: None on substantive tax effe....