Answer

1. F

   Facts

   Rent that you could not realise can be excluded from annual value if conditions are met, such as the tenancy being genuine and steps taken to recover. If you recover it later, it is taxed in that year with a 30% deduction. Keep records of your efforts.

2. P

   Provisions and law

   • Sec 23, Income-tax Act 1961Annual value rules: up to two self-occupied houses have nil annual value; others are treated as let out at expected rent
   • Sec 25A, Income-tax Act 1961Arrears and unrealised rent are taxed when received, with a 30% deduction
3. A

   Analysis

   If annual rent was ₹2,40,000 and ₹1,20,000 was not received, report actual realisation as the rules allow, rather than the full amount. If the tenant pays ₹1,20,000 next year, Sec 25A taxes it then, after a 30% deduction, even if you no longer own the property. Keep the agreement, notices and any legal steps. This is a common point of dispute, so document it well.

4. C

   Conclusion

   1. 1Keep the rent agreement and payment record.
   2. 2Document recovery efforts such as notices.
   3. 3Report realised rent and the unrealised amount as allowed.
   4. 4Report any later recovery under arrears or unrealised rent.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.