Rental Income Tax Calculator
The 30% deduction has nothing to do with what you spent — and your choice of tax regime can be worth more than everything else on the page.
What the Rental tax calculator does
A rental income tax calculator computes income from house property. Gross annual value less municipal tax actually paid gives net annual value; 30% of that is a flat allowance under section 24(a), regardless of real spending; then home loan interest. The regime decides whether a resulting loss reaches your other income.
The 30% is an allowance, not a reimbursement
Section 24(a) gives you 30% of the net annual value, and that figure has nothing to do with what you actually spent. Repairs, painting, maintenance, society charges, the broker’s fee on re-letting — all of it is inside the 30% and none of it is separately deductible.
It cuts both ways. Spend ₹3 lakh replastering and you still deduct exactly 30%. Spend nothing at all and you still deduct 30%.
⚠️ Municipal tax is the one thing outside it — but only where you actually paid it during the year. And the 30% comes off after that, not off the rent.
A statement of how section 24 computes income from house property, not a computation on your figures. An estimate on the transactions available to us, not a tax computation or filing advice. Confirm the position with a qualified tax adviser before relying on it.
Your inputs
What is the property doing?
Up to 2 houses can be treated as self-occupied. A third is taxed on notional rent whatever it is doing.
Which tax regime are you on?
This is usually the largest number on the page. The new regime has been the default since FY 2023-24.
What the tenant actually pays you across the year.
Municipal or fair rent. The annual value is the HIGHER of this and what you actually received.
Deductible only in the year it is paid, and only by the owner.
Here to show what it buys, which is nothing — not this year, and not the year you eventually settle it.
This does not enter the computation at all. It is here so you can see the gap between it and the allowance.
Section 24(b). Whether it is worth anything depends entirely on the regime toggle above.
Salary, business, interest. A house property loss may or may not be allowed to reach it.
Who is your tenant?
An individual withholds 2% above ₹50,000 a month. A business withholds 10% above ₹6,00,000 a year.
Your income tax slab
Rental income is added to your other income and taxed at your marginal rate.
Loss from house property this year
₹2,17,000
⚠️ None of it reaches your other income. The new regime does not allow a house property loss to be used to reduce anything else, so the whole ₹2,17,000 carries forward instead.
- Gross annual value
- ₹7,20,000
- Less municipal tax paid
- − ₹30,000
- Net annual value
- ₹6,90,000
- Less standard deduction (30%)
- − ₹2,07,000
- Less home loan interest
- − ₹7,00,000
- Loss from house property
- − ₹2,17,000
- Your tenant holds back 2%
- ₹14,400
Income from house property computed on the figures you entered, not from your records. An estimate on the transactions available to us, not a tax computation or filing advice. Confirm the position with a qualified tax adviser before relying on it.
The allowance is ₹1,27,000 more than you spent
You spent ₹80,000 and deduct ₹2,07,000 regardless. That gap is a genuine windfall for a property that needs little doing to it — and it disappears the moment a big repair bill arrives, because the allowance does not move.
What you actually spent
₹80,000
Never enters the computation. Shown only for the comparison.
The 30% allowance
₹2,07,000
30% of the ₹6,90,000 net annual value.
Allowance beyond spending
₹1,27,000
Relief with no money behind it.
One more thing worth checking on your own return. The 30% comes off the net annual value, after municipal tax. Taking it off the rent instead would have given ₹2,16,000 here — ₹9,000 too much.
An estimate on the transactions available to us, not a tax computation or filing advice. Confirm the position with a qualified tax adviser before relying on it.
Your regime is worth ₹62,400 a year on this property alone
The loss is identical under both. What differs is what it may reach. The old regime lets ₹2,00,000 of it reduce your other income under section 71(3A). The new regime lets none of it — not a smaller amount, none.
Tax on the new regime
₹4,68,000
What you selected.
Tax on the old regime
₹4,05,600
The same figures, the other way.
Difference
₹62,400
Every year the loan runs, not once.
Two cautions before acting on that number. The regime applies to your whole return, not to this property — the old regime may cost you more elsewhere than it saves here, and this page cannot see the rest of it. And a salaried taxpayer may switch each year while someone with business income generally may not. Take both sides to your accountant.
An estimate on the transactions available to us, not a tax computation or filing advice. Confirm the position with a qualified tax adviser before relying on it.
What this assumes
- One property, wholly owned. Jointly owned property is apportioned between owners in their ownership shares and each computes their own figures. Multiple let-out properties are computed separately and then aggregated, which can change which gains a loss can reach.
- A full year, fully let. Vacancy relief under section 23(1)(c) and unrealised rent are not modelled, and both reduce the annual value where they apply. A property let for part of the year needs the months rather than an annual figure.
- A flat marginal rate. Rental income is added to your other income and charged at the single rate you selected plus 4% cess, rather than run through the slabs. Surcharge is excluded, and the comparison between regimes ignores every other difference between them.
- Pre-construction interest is not split. Interest for the years before possession is claimable in five equal instalments from the year of completion, on top of the current year’s interest. Enter the amount you can actually claim this year rather than the interest you paid.
- Withholding is the tenant’s duty, not yours. The figure shown is what they should deduct and pay over; it is credited against your own bill when you file. If they have not deducted it, that is their exposure rather than a saving for you.
No returns are assured or guaranteed. Any illustration of returns is a mathematical projection, not a promise. GrowIQ Capital is an AMFI registered mutual fund distributor (ARN-352082), not a SEBI registered investment adviser and not a tax adviser. Choosing a tax regime affects your entire return rather than one property — this is arithmetic on the figures you entered, and the decision belongs with a qualified chartered accountant who can see the rest of your income.
How the rental income tax calculation works
GAV − municipal tax PAID = NAV. Less 30% of NAV (flat, whatever you spent) less section 24(b) interest = income from house property.
Rental income is charged under income from house property, sections 22 to 27, and the computation runs in a fixed order that decides the answer. Gross annual value is the higher of the rent actually received and what the property could reasonably fetch; a self-occupied house has a nil annual value, and a third house is deemed let out at notional rent whatever it is really doing. From that comes municipal tax, but only what the owner ACTUALLY PAID during the year — a bill raised and left unsettled buys no deduction, and section 23 does not defer it to the year of eventual payment either. What remains is net annual value. Section 24(a) then allows thirty per cent of it, and this is the part most landlords get wrong twice over. It is a flat allowance with no relationship to real spending: repairs, painting, society charges and re-letting commission are all inside it and none is separately deductible, so spending ₹3 lakh still yields exactly 30% and spending nothing still yields exactly 30%. And it is computed on net annual value rather than on rent, so taking 30% of the rent overstates it by 30% of the municipal tax on every property that pays any. Section 24(b) then allows the interest on borrowed capital, and this is where the regimes part company. Under the old regime a self-occupied house gets interest up to ₹2 lakh and a let-out property gets it without limit, after which section 71(3A) caps the loss that may be set off against other heads at ₹2 lakh a year with the balance carried forward eight years against house property income only. Under the new regime, which has been the default since FY 2023-24, a self-occupied house gets no interest deduction at all, and while a let-out property still deducts interest against its own rent, a resulting loss cannot be set off against other heads at all — not a smaller amount, none. The same loan on the same flat is therefore worth a great deal under one regime and nothing under the other, and that difference is usually larger than everything else on the page combined. Withholding falls on the tenant rather than the landlord: an individual deducts 2% under section 194-IB above ₹50,000 of rent a month, and a business or professional tenant deducts 10% under section 194-I above ₹6 lakh a year.
Frequently asked questions
How is rental income taxed in India?
As income from house property. Take the gross annual value — the higher of the rent you received and what the property could reasonably fetch — deduct municipal tax you actually paid to get net annual value, then deduct a flat 30% under section 24(a) and your home loan interest under 24(b). What remains is added to your other income and taxed at your slab rate.
Can I deduct actual repairs and maintenance?
No, and this surprises most landlords. The 30% under section 24(a) is a flat allowance with no relationship to what you spent. Repairs, painting, society charges and the broker's fee on re-letting are all inside it and none is separately deductible. Spend ₹3 lakh and you still deduct 30%; spend nothing and you still deduct 30%.
Is the 30% calculated on rent or on net annual value?
On net annual value, which is after municipal tax comes off. Taking 30% of the rent instead overstates the deduction on every property that pays any municipal tax at all — by exactly 30% of that tax. It is a small error on a small municipal bill and a real one on a large property.
Is municipal tax deductible if I have not paid it?
No. Section 23 allows municipal tax in the year it is actually paid by the owner, so a bill raised and left unsettled buys nothing — and it is not deferred relief either. Paying it before 31 March turns it into a deduction for that year. Leaving it does not move the deduction to the year you eventually settle it.
Can I set off a house property loss against my salary?
It depends entirely on your regime, and this is usually the largest number involved. Under the old regime section 71(3A) lets up to ₹2 lakh of house property loss reduce your other income, with the balance carried forward eight years against house property income only. Under the new regime none of it may be set off against other heads — not a smaller amount, none.
Does the new tax regime allow home loan interest?
For a let-out property, yes — the interest is still deducted against that property's own rent. For a self-occupied house, no: the section 24(b) deduction of up to ₹2 lakh simply does not exist under the new regime. So the same loan on the same house is worth a great deal under one regime and nothing under the other.
Do I pay tax on an empty second or third house?
Up to two houses can be treated as self-occupied with an annual value of nil. A third is deemed let out whatever it is actually doing — locked, empty, or lived in by a parent — and taxed on the rent it could reasonably have fetched. The 30% and municipal tax still come off and the loan interest is allowed in full, so a mortgaged empty property often fares better under this rule than an unmortgaged one.
GrowIQ Capital provides financial data analytics, market information and educational content. We are not a SEBI-registered Investment Adviser or Research Analyst. Nothing on this platform constitutes investment advice or a recommendation to buy or sell any security. No returns are assured or guaranteed. Any illustration of returns is a mathematical projection, not a promise. Past performance is not indicative of future returns and does not guarantee future results.