New Provision
Section 23, IT Act 2025
Replaces (IT Act 1961)
25A
Chapter
Chapter IV — Computation of Total Income
Effective From
1 April 2026
Statutory Text — Section 23
(1) 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 to be the income from house property in respect of the tax year in which such rent is received or realised. (2) The amount deemed to be income from house property under sub- section (1) shall be included in the total income of the assessee under the head
CH. IV C.- INCOME FROM HOUSE PROPERTY [Sec 20-25] “Income from house property”, whether the assessee is the owner of the property or not in that tax year. (3) A sum equal to 30% of the arrears of rent or the unrealised rent referred to in sub-section (1) shall be allowed as deduction.
Shahi & Co. — Our Understanding
This section falls under Chapter IV which governs the computation of total income under all five heads: Salaries, House Property, Business & Profession, Capital Gains, and Other Sources.
Practical Note: All income earned by a taxpayer in a tax year must be computed under one of these heads. Proper classification determines the applicable deductions, set-off rules, and tax rates.
Shahi & Co., Chartered Accountants
Need guidance on Section 23?
Our Direct Tax team advises individuals, businesses, and start-ups on all provisions of the Income Tax Act, 2025. We help you navigate the transition from the old Act with zero disruption to your compliance calendar.
Consult Our Tax Team →
Disclaimer: This is a reproduction of Section 23 of the Income Tax Act, 2025 (No. 30 of 2025) as published in the Official Gazette of India (CG-DL-E-22082025-265620) for informational and reference purposes only. Shahi & Co., Chartered Accountants makes no warranty as to completeness or accuracy. For the official authenticated text refer to
egazette.gov.in or
incometaxindia.gov.in. This does not constitute legal or tax advice.