If a taxpayer claims an admissible deduction for an expense (e.g., insurance premium) but fails to actually pay that liability within a specific period, the unpaid amount is added back to his 'Income from Property'. What is the statutory time limit before this add-back occurs?

Correct answer: B) B) Three years from the end of the tax year in which the deduction was allowed.

Explanation

If an allowed liability is not paid within three years of the end of the tax year in which the deduction was allowed, the unpaid amount becomes chargeable to tax under 'Income from Property' in the first tax year following the end of those three years.