ITR-4 Unrealised Rent Field AY 2026-27: Property-Income Reconciliation Guide

By Ravi Sisodia · Reviewed by CA Divyanshu Sengar · Updated 5 October 2026

AY 2026-27 ITR-4 introduces a specific field for rent that cannot be realised. Taxpayers should distinguish current-year unrealised rent from arrears recovered later and maintain tenant-level evidence before reducing rental value.

Finin2min 2-Minute Summary

• The Income Tax Department's AY 2026-27 ITR-4 FAQ identifies a new specific field for 'rent which cannot be realised'.
• Unrealised rent is not the same as rent merely received late after year-end.
• Maintain tenant, period, amount, lease and recovery evidence supporting the treatment.
• Arrears or previously unrealised rent recovered in a later year can have separate tax treatment.
• The property computation should reconcile gross rent, unrealised amount, municipal taxes, interest and final house-property income.

Start with a tenant-month reconciliation

List contractual rent for each month, amount received, amount outstanding at year-end, amount disputed and any rent waived/renegotiated under a genuine agreement. This avoids treating every receivable as legally 'unrealised rent'.

Keep the lease and bank ledger beside the worksheet.

Evidence should explain why rent could not be realised

Preserve notices, correspondence, vacancy/tenant dispute facts and later recovery. The exact statutory conditions for excluding unrealised rent should be checked against the house-property rules; the new field does not create a free deduction for bad debt.

If rent is recovered later, retain the original-year file so subsequent reporting can be matched.

Avoid double reduction

Do not reduce gross rent for the same amount in two places or also treat it as a business bad debt. Reconcile the portal's computation with the property working before submission.

Where two properties are reported, keep separate unrealised-rent schedules.

Unrealised-rent case: tenant pays after year-end but before filing

A tenant may miss the March rent and pay it in June before the return is filed. The taxpayer should not automatically classify the amount as year-end unrealised rent without applying the statutory house-property rules and considering the eventual receipt. The ledger should show what was receivable, what met the conditions for unrealised rent and when recovery occurred.

Keep the subsequent receipt linked to the original property file so the later-year tax treatment is not lost when accountants change or the tenant leaves.

• Link later collections to the original unrealised-rent schedule.
• Do not treat every year-end receivable as irrecoverable.
• Prevent the same rent from being reduced and later omitted on recovery.

Year-on-year continuity

Maintain an opening balance of rent previously treated as unrealised and track what is collected, waived or still outstanding in the next year. This avoids losing tax history when tenants, accountants or property managers change. The schedule should identify the year in which the original rent arose and the year in which any recovery is ultimately recognised.

• Carry forward an unrealised-rent register.
• Link later recovery to the original assessment-year working.

Unrealised-rent checklist

• Tenant and property identified.
• Contractual rent by period.
• Receipts vs outstanding reconciled.
• Statutory conditions checked.
• Recovery attempts/evidence retained.
• Portal field matches working.
• Later recovery tracked.

Questions readers commonly ask

What changed in AY 2026-27?

The ITR-4 FAQ says a specific unrealised-rent field was added.

Is unpaid rent automatically deductible?

No. Apply the governing house-property rules and facts.

What if rent is recovered next year?

Track it because subsequent recovery can have separate tax treatment.

Should I net it against other income?

No. First compute the relevant house-property item correctly.

Official / primary sources

• Income Tax Department - ITR-4 FAQs - AY 2026-27 unrealised-rent field
• Income Tax Department - ITR-4 validation rules - Portal validation controls

Disclaimer

Important: General educational and professional-reference material. Verify the current operative regulation/circular, portal version and exact facts before acting. Consultation papers are proposals unless a later operative instrument adopts them. Educational and professional reference only; confirm the current law, rates and the facts of your case before relying on this page.