TaxSaral
Section 22House Propertywas Section 24 in IT Act 1961

Deductions from House Property Income

Two deductions from annual value: (a) 30% standard deduction for let-out properties, and (b) interest on housing loan — up to ₹2 lakh for self-occupied; no cap for let-out.

Who this applies to

Property owners — the 30% deduction applies only to let-out properties, not self-occupied ones.

Key Points

  • The 30% deduction is automatic — no receipts for repairs or maintenance needed.
  • 30% is applied on Net Annual Value (after municipal taxes), not on gross rent.
  • Home loan interest for let-out property: fully deductible with no cap (subject to set-off limits).
  • Total loss from house property that can be set off against other income is capped at ₹2,00,000 per year (excess carried forward for 8 years).

Worked Example

1

Let-out flat with home loan

Scenario

Reena's rented flat has NAV of ₹3,00,000 (after municipal taxes). She pays ₹2,40,000 per year in home loan interest on this property.

Calculation

Net Annual Value (NAV):       ₹3,00,000
Less: 30% standard deduction: – ₹90,000
Less: Home loan interest:      – ₹2,40,000
Income from House Property:    – ₹30,000 (a loss)

This ₹30,000 loss can be set off against her salary income.

Result

Reena has a ₹30,000 house property loss, which reduces her total taxable income. If the interest were higher (say ₹3,50,000), the loss would be ₹1,40,000 — still within the ₹2L set-off cap.

Related Sections

Section 71Home Loan Interest — Deduction Limit
Section 21Annual Value of House Property
Section 20House Property — Charging Section

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Section references are based on the Income Tax Act 2025 (Tax Year 2026-27). Examples are illustrative — verify with a Chartered Accountant before filing.