Income from House Property — Tax Guide with Examples

Delhi has thousands of rental property owners. Many overpay because they miss Section 24 deductions.

Income from house property is one of the five heads of income under the Income Tax Act. It covers rental income as well as deemed income from properties you own.

How to Calculate

1. Determine Annual Value (expected rent or actual rent, whichever is higher)
2. Deduct municipal taxes paid
3. Deduct 30% standard deduction (Section 24(a))
4. Deduct home loan interest up to ₹2 lakh (Section 24(b))

Special Cases

• Self-occupied property: Annual value = Nil. Can still claim home loan interest up to ₹2L
• Deemed let-out: If you own more than 2 houses, third onwards is deemed let-out
• Vacant property: Higher of actual rent received or fair rental value

Home loan interest deduction under Section 24(b) is ₹2 lakh for self-occupied property. For let-out property, there is no upper limit.