Just a moment...

⚠ ✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Keyword Search :
AI Tools : New
Ask tax questions in natural language. Powered by AI trained on the TaxTMI legal database. Use AI Tools ➞
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
    6. Text Search
  6. The system will try to fetch results that contains ALL your words.
  7. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
    8. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search ❯
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws---- ❯
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ---- ❯
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
    Manuals Service Tax
    Whether proceedings can be reopened on the basis of a favourable decision in another case?
    Manuals Service Tax
    Whether a wrong decision by jurisdictional court is binding on the parties in absence of any appeal ...
    Manuals Service Tax
    Whether an order becomes a final order if no appeal has been filed against it?
    Manuals Service Tax
    Whether right to appeal is a inherent right? Whether it is necessary that right of appeal must be ex...
    Manuals Service Tax
    What is the meaning of 'Reason to Believe' in context to search & seizure provisions?
    Manuals Service Tax
    Whether in case, composite price (inclusive of service tax) is shown in invoice and no separate duty...
    Manuals Service Tax
    Whether Doctrine of unjust enrichment is applicable on finalisation of provisional assessments?
    Manuals Service Tax
    Whether Doctrine of unjust enrichment is applicable on duty paid under protest?
    Manuals Service Tax
    Whether data in "CD" can be a admissible evidence for refund claim under Section 11B? Whether data i...
    Manuals Service Tax
    Whether limitation of refund filing is applicable on the cases where amount paid to the department a...
    Manuals Service Tax
    Whether deposit of service tax before rendering services will be covered under limitation of refund...
    Manuals Service Tax
    Whether Appellate authority has empowered to increase the penalty? Whether Appellate authority can i...
    Manuals Service Tax
    Whether the penalty under section 78 of the Finance Act, 1994 can be reduced below the minimum limit...
    Manuals Service Tax
    Whether the penalty under Section 76 of the Finance Act, 1994 can be reduced below the limit prescri...
    Act Rules Service Tax
    Whether Service tax paid by back calculations i.e. service tax separately not charged will be covere...
    Act Rules Service Tax
    Whether assessee is liable to pay collected service tax as per provision of Sec.73A even if his turn...
    Manuals Service Tax
    Whether ignorance of law can be a factor for not to revoke extended period of limitation?
    Manuals Service Tax
    In what circumstances extended period of limitation is not enforceable? Whether SCN can be issued fo...
    Act Rules Service Tax
    Whether show cause notice related to period beyond 18 months or 5 years as the case may be, is valid...
    Manuals Service Tax
    Whether it is mandatory to mention specific head / sub head of services in SCN in which demand of se...
❮
❯
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

Open Link
Notes
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
Manuals Service Tax
Whether proceedings can be reopened on the basis of a favourable decision in another case?
Show AI Summary
Finality of proceedings: tax assessments cannot be reopened due to another taxpayer's favourable decision without recall in the same case.
Reopening tax assessment proceedings based on a favourable decision in another assessee's case is ordinarily not permitted; a final order in an assessee's own case remains effective until it is specifically recalled or set aside in that same proceeding.
Manuals Service Tax
Whether a wrong decision by jurisdictional court is binding on the parties in absence of any appeal ...
Show AI Summary
Finality of unappealed decisions: unchallenged jurisdictional rulings bind the parties until lawfully reversed.
A jurisdictional court's unappealed ruling, even if incorrect, becomes final and binding between the parties and remains so until reversed by a higher forum or other statutory remedy; thus unchallenged classificatory or determinative decisions must be obeyed in subsequent proceedings unless lawfully set aside.
Manuals Service Tax
Whether an order becomes a final order if no appeal has been filed against it?
Show AI Summary
Finality of administrative orders follows when no appeal is filed, and remand directions limit reconsideration scope.
An administrative order attains finality where an entitled party does not file an appeal against a Tribunal disposition; remand orders limit reconsideration to the specific issues directed by the Tribunal, and parties who do not contest merits before the Tribunal forfeit the ability to re argue those merits, so that authorities acting on remand cannot expand review beyond the remand directions.
Manuals Service Tax
Whether right to appeal is a inherent right? Whether it is necessary that right of appeal must be ex...
Show AI Summary
Right of appeal is not inherent; it exists only when statute creates and defines it, including scope and procedure.
The right of appeal is not inherent but is a statutory construct: appellate existence, scope and procedure must be authorized by the creating provision; omissions in citation do not automatically bar an otherwise maintainable appeal; absence of an appellate provision does not prevent an order from becoming final.
Manuals Service Tax
What is the meaning of 'Reason to Believe' in context to search & seizure provisions?
Show AI Summary
Reason to believe requires subjective belief grounded in material evidence, preventing arbitrary or capricious searches.
The concept of reason to believe requires that a subjective opinion be based on material on the record, not arbitrary or whimsical; it must be held in good faith and courts may test whether the reasons have a rational and relevant connection to the formation of belief, excluding extraneous considerations.
Manuals Service Tax
Whether in case, composite price (inclusive of service tax) is shown in invoice and no separate duty...
Show AI Summary
Inclusive pricing does not establish passing on of tax burden; composite invoices alone do not prove unjust enrichment.
Showing a composite price on an invoice does not, by itself, establish that the supplier passed the tax burden to customers or realized unjust enrichment; where prices remained unchanged after a tax was imposed, inclusive pricing alone is insufficient evidence that any element of tax was added to the price, and proof of an added tax component is required to infer passing on of the tax.
Manuals Service Tax
Whether Doctrine of unjust enrichment is applicable on finalisation of provisional assessments?
Show AI Summary
Doctrine of unjust enrichment excluded where a refund arises only after finalisation of provisional assessment.
The doctrine of unjust enrichment does not apply to refund claims that arise after the finalisation of provisional assessments; refunds or recoveries consequent on the final determination of duty liability fall outside the interim statutory refund framework and are not barred by unjust enrichment objections.
Manuals Service Tax
Whether Doctrine of unjust enrichment is applicable on duty paid under protest?
Show AI Summary
Unjust enrichment doctrine not bar to refund of duty paid under protest; provisional assessments preserve refund entitlement.
The doctrine of unjust enrichment does not bar refund claims for duty paid under protest; recoveries or refunds consequent on final determination of duty liability fall outside bars that would deny restitution. Provisional assessments and unresolved price and classification lists render clearances provisional, supporting the taxpayer's entitlement to have refund claims adjudicated on the basis of final liability rather than dismissed as struck by unjust enrichment.
Manuals Service Tax
Whether data in "CD" can be a admissible evidence for refund claim under Section 11B? Whether data i...
Show AI Summary
Admissibility of electronic records: computerised data on CD can support service tax refund claims and show no transfer of tax burden.
Data on compact disc (CD) can be admissible evidence for service tax refund claims where it constitutes computerised records recognised under the Information Technology Act and the Service Tax Rules. Such electronic records may also be used to prove that the incidence of service tax was not transferred to another party (absence of unjust enrichment), provided the data meets the statutory criteria for admissible computerised evidence and forms part of the assessee's maintained electronic records.
Manuals Service Tax
Whether limitation of refund filing is applicable on the cases where amount paid to the department a...
Show AI Summary
Limitation on refund filings: time-bar inapplicable where payments were not service tax and were excess realisations.
Limitation under Section 11B(1) applies only to refund claims of a duty of excise and interest; payments not constituting service tax or lawful excise levy are outside that bar and may be refunded. Judicial authorities (M/s Natraj and Venkat Associates; ITC Ltd.) recognise that excess realisations beyond what the statute permits are realisations outside the Act and thus not subject to the statutory limitation on excise refunds.
Manuals Service Tax
Whether deposit of service tax before rendering services will be covered under limitation of refund...
Show AI Summary
Limitation on service tax refunds: late claims are barred unless tax was paid under protest.
Refunds of amounts paid as service tax are governed by the statutory limitation provisions; where payments were credited to the service tax account and the claimant acknowledged applicability of the limitation rule, a refund claim filed after the limitation period is barred unless the tax was paid under protest.
Manuals Service Tax
Whether Appellate authority has empowered to increase the penalty? Whether Appellate authority can i...
Show AI Summary
Appellate authority power to increase penalties is limited; payment of tax and interest can justify mitigation of penalty.
Appellate authority does not have power to increase or impose a fresh penalty; payment of tax and interest that neutralises pecuniary advantage is relevant for mitigation, and taxpayer status and proportionality are material in assessing whether a revised penalty is unduly harsh under the statutory penalty framework.
Manuals Service Tax
Whether the penalty under section 78 of the Finance Act, 1994 can be reduced below the minimum limit...
Show AI Summary
Penalty minimums prohibited from reduction: statutory scheme prevents lowering prescribed service tax penalty through discretionary provisions.
Penalty under section 78 of the Finance Act, 1994 cannot be reduced below the statutory minimum by invoking section 80; a conjoint reading of the provisions shows no discretion to levy or reduce a penalty below the prescribed floor, and appellate bodies and tribunals cannot read such power into the statutory scheme.
Manuals Service Tax
Whether the penalty under Section 76 of the Finance Act, 1994 can be reduced below the limit prescri...
Show AI Summary
Penalty under Section 76 cannot be reduced below the statutory minimum; authority's discretion is confined to the prescribed range.
Section 76 penalty under the Finance Act, 1994 confines the authority to a legislatively prescribed minimum-to-maximum range; authorities lack power to reduce the penalty below the statutory minimum per day of default, and courts have rejected construing any additional discretion into the provision as that would amount to rewriting the statute.
Act Rules Service Tax
Whether Service tax paid by back calculations i.e. service tax separately not charged will be covere...
Show AI Summary
Service tax deposit obligations do not arise where tax was not invoiced or collected, limiting unjust enrichment claims.
Where no invoice was raised and no amount was specifically collected as service tax from recipients, the statutory duty to deposit such tax does not arise because there is no collected tax to be held on behalf of the Government, and absence of pass through means the legal condition for invoking unjust enrichment is not satisfied.
Act Rules Service Tax
Whether assessee is liable to pay collected service tax as per provision of Sec.73A even if his turn...
Show AI Summary
Deposit of collected service tax must be remitted even if small provider exempt; penalties apply for non-deposit.
Section 73A requires that service tax collected from customers be deposited with the Central Government even if the collector avails the small service provider exemption; tribunals have held that collection triggers an obligatory deposit and failure to deposit and to file returns attracts penal action and enforcement for non-compliance.
Manuals Service Tax
Whether ignorance of law can be a factor for not to revoke extended period of limitation?
Show AI Summary
Ignorance of law or illiteracy can undermine findings of willful suppression, affecting the validity of tax demand and penalties.
Administrative demands and penalties based on alleged willful suppression of taxable services require supporting record evidence and must correspond to allegations in the show cause notice; where the record does not substantiate suppression and the allegation was not made in the notice, the resultant service tax demand and penalties are not sustainable.
Manuals Service Tax
In what circumstances extended period of limitation is not enforceable? Whether SCN can be issued fo...
Show AI Summary
Extended limitation period: not available where assessee had bona fide belief or doubt about service tax liability.
Extended limitation cannot be invoked where the assessee had a bona fide belief that no service tax was payable, where bona fide doubt existed about chargeability, where the assessee voluntarily approached the department earlier, where the issue is one of legal interpretation creating genuine confusion, or where earlier favorable decisions were subsequently overruled without evidence of suppression.
Act Rules Service Tax
Whether show cause notice related to period beyond 18 months or 5 years as the case may be, is valid...
Show AI Summary
Limitation for recovery of service tax prevents collection for time barred periods but notice remains partly effective.
A show cause notice that includes periods beyond the statutory limitation does not become wholly invalid; the Department cannot recover tax for time barred periods, and the assessee may raise the limitation defence during proceedings. The same rule applies to notices extending beyond a shorter statutory limitation-the excess period yields no departmental entitlement to recovery but does not vitiate valid allegations within the limitation.
Manuals Service Tax
Whether it is mandatory to mention specific head / sub head of services in SCN in which demand of se...
Show AI Summary
Specific service allegation: tax liability cannot be confirmed unless the show-cause notice specifies the service head.
A show-cause notice must specifically identify the service head or sub-head relied upon; absent a precise allegation as to the applicable classification, tax liability cannot be confirmed, and alternative classifications suggested by the Commissioner without being pleaded in the notice render any demand unsustainable.

TMI Notes

Back

All TMI Notes

Showing Results for :
Reset Filters
No Records Found

TMI Notes

Home › TMI Notes › Income Tax › Act-Rules › Category › This
Back

All TMI Notes

whatsapp Join Channel
Showing Results for : Reset Filters
Income Tax

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)

20 August, 2025

Contents
Acts
Rules & Regulations
Summary
Note

Note

-

Bookmark

Print

Print

Print Options

Section 23 Arrears of rent and unrealised rent received subsequently.

Income-tax Act, 2025 [As Passed]

At a Glance

These documents set out Clause/Section 23 dealing with tax treatment of arrears of rent and unrealised rent realised subsequently under the Income-tax law as presented in the Income Tax Bill, 2025 (old version) and Section 23 of the Income-tax Act, 2025 (as passed). They matter to taxpayers 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 receipts as income from house property for the year in which they are received or realised and prescribes a specific deduction. Definitions or expansive explanations of terms such as "arrears of rent", "unrealised rent", "tenant", "assessee", or "owner" are: Not stated in the document.

Statutory Provision Mode

Text & Scope

The operative elements of both documents are as follows (text summary):

  • The amount of arrears of rent received from a tenant, or unrealised rent realised subsequently from a tenant, shall be deemed to be income from house property for the tax year in which such rent is received or realised.
  • That amount shall be included in the total income of the assessee under the head "Income from house property" in that tax year, "whether the assessee is the owner of the property or not".
  • A deduction equal to 30% of the arrears/unrealised rent referred to above shall be allowed.

Coverage: The provision applies to any assessee receiving such rent receipts from a tenant; it expressly applies irrespective of legal ownership in the year of receipt/realisation. The provision thus draws the tax character to the year of receipt rather than year of accrual/entitlement in some prior year(s).

Interpretation

The text indicates a legislative intent to treat cash receipts of past or previously unrealised rent as income from house property in the year of realisation or receipt. The specific inclusion "whether the assessee is the owner of the property or not" indicates 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 document.

Exceptions/Provisos

No provisos, carve-outs or express exceptions are present in either text. There is no express limitation as to quantum, time-bar considerations, set-off against prior year losses, or interaction with any other head. Specific exceptions (e.g., for statutory tenants, co-owners, instances where rent belonged to another person earlier) are: Not stated in the document.

Illustrations

  • Example 1: A person receives rent arrears of Rs. 1,00,000 in tax year T from a tenant for year T-3. Under the provision Rs. 1,00,000 is treated as income from house property in year T and a deduction of 30% (Rs. 30,000) is allowed, making net taxable amount under house property Rs. 70,000. (This numerical treatment follows directly from the text.)
  • Example 2: An assessee who is not the legal owner of the property in year T but receives previously unrealised rent realised subsequently from a tenant in year T must include that receipt as income from house property in year T and claim 30% deduction on that amount. (Fact pattern and computational implication are directly grounded in the statutory lines: "whether the assessee is the owner of the property or not".)
  • Example 3: If unrealised rent of Rs. 50,000 is realised in year T, the taxable inclusion under house property is Rs. 50,000 less 30% = Rs. 35,000 net. (No further illustrations or contextual limits are provided in the text.)

Interplay

No Rules, Notifications, Circulars, or other statutory cross-references 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. Taxpayers receiving such receipts must ensure correct classification under "Income from house property" rather than treating it under other heads (e.g., "Income from other sources").
  • Record-keeping/evidence: Since the provision focuses on the year of receipt/realisation and disregards ownership status, taxpayers should retain documentary evidence of receipt (bank credits, rent receipts), the nature of the receipt (arrears vs current rent), and correspondence or documents establishing the period to which arrears relate. Proof of any prior ownership status or assignments may be relevant for administrative or audit purposes. The text does not state specific evidentiary standards or required forms-those are: Not stated in the document.

Key Takeaways

  • Arrears of rent and unrealised rent realised subsequently are to be taxed as income from house property in the year of receipt/realisation.
  • The taxable inclusion is to be made under the head "Income from house property" in that year even if the recipient is not the owner in that year.
  • A flat deduction of 30% of the arrears/unrealised rent is allowed against such receipts.
  • The Bill (old version) and the Act (as passed) contain substantively the same operative provisions; differences are limited to drafting/wording and an explanatory line present in the Bill document.
  • No provisos, definitions, transitional rules or cross-references are provided in the text to address timing disputes, ownership transfers, or set-off-such 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 effect, but the Act wording is grammatically clearer and thus reduces potential challenges based on drafting ambiguity.
  • Express explanatory sentence: The Bill document ends with an explanatory line: "Clause 23 of the Bill provides for taxability of arrears or unrealised rent received subsequently irrespective of ownership of the property in tax year." The Act document does not include that explanatory line.
    • Practical impact: Minimal-this is an explanatory remark rather than a legal change. The Act's operative clauses already contain the substance ("whether the assessee is the owner ... or not").
  • Labeling: One document is presented as "Clause 23 - Income Tax Bill, 2025 - Old Version" while the other is "Section 23 - Income-tax Act, 2025 [As Passed]".
    • Practical impact: Reflects legislative progression from Bill to Act; substantive approach unchanged.

Action Points (derived from the text)

  • Taxpayers receiving arrears or previously unrealised rent in a tax year should include the gross receipt under "Income from house property" and claim the 30% deduction provided by the provision.
  • Maintain contemporaneous records showing receipt, the source tenant, and the period to which the arrears relate; retain documents concerning ownership status if relevant for other legal or accounting purposes.
  • Where ownership has changed between the period of accrual and the period of receipt/realisation, be aware that the person receiving the money is taxed under house property in the year of receipt, per the statutory language.
  • Consider review of prior tax filings only to the extent the text or other applicable law obliges adjustment: the document is silent on retrospective assessment, set-off, or relief mechanisms - those are Not stated in the document.

Full Text:

Section 23 Arrears of rent and unrealised rent received subsequently.

Topics

Acts Income Tax
Next ➔