Question

Explain the tax treatment of unrealized rent.​

Answer 1

Answer:

tax is applied in its percentage and till the date of unrealise i.e amount of rent *percentage of tax*the months of unrealise

suppose rent amount is 20000 and tax percentage is 10% and period is from 1st October and rent relaised on 31st march then the answers would be 20000*10/100*6/12or1/2= 1000

Answer 2

The unrealized tax is referred to the rent of the property where the  owner was not able to get from the tenant then the the unrealized rent is deducted from actual rent of the previous year. The tax liable for the unrealized rent is in form  income got from the Income from house property

Explanation:

• If the tenant has  has not paid the rent for the property to the owner  then it can be  recovered from the rent of the previous year in form of unrealized rent. It is deducted it from actual rent of the previous year of the tenant.
• The rent is to be paid by the defaulting tenant to the owner and the tax is liable to be deducted under the head of income from house property
• The owner should make use of ways to recover such amount including through the legal proceedings

To know more about unrealized rent

Accounting treatment for unrealized profit in amalgamation

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