What is the Section 24(a) standard deduction on rental income?

Section 24(a) grants a flat 30% standard deduction on Net Annual Value (NAV) of let-out property. This deduction is allowed regardless of your actual expenditure on repairs, painting, or maintenance.

Can municipal property taxes be deducted from rental income?

Yes, municipal property taxes paid by the property owner during the financial year can be fully deducted from Gross Annual Rent to arrive at Net Annual Value (NAV).

How much home loan interest is deductible on let-out property?

For let-out property, the entire home loan interest paid during the year is deductible under Section 24(b). However, set-off of net loss under house property against other income (salary/business) is capped at Rs 2 Lakh per financial year.

Is rental income taxable under New Tax Regime Section 115BAC?

Under the New Tax Regime, rental income is still entitled to municipal tax deduction and Section 24(a) 30% standard deduction. However, loss under house property cannot be set off against salary or business income.

Is TDS deducted on rental income in India?

Yes, under Section 194I, if annual rent paid by a corporate tenant exceeds Rs 2.4 Lakh, TDS is deducted at 10%. For individual tenants paying rent over Rs 50,000/month, TDS is 5% under Section 194IB.

What happens if a property remains vacant for part of the year?

If a property is vacant during part of the year, Gross Annual Value is based on actual rent received for the occupied period, providing relief for vacancy loss.

Are maintenance fees paid to society deductible from rent?

If society maintenance is paid directly by the tenant or included in rent, only the net rent retained by the landlord is considered Gross Annual Value.

How to calculate net taxable income from rented house?

Taxable Rental Income = (Gross Rent - Municipal Taxes) - 30% Standard Deduction - Home Loan Interest Paid.

How does this rental income tax calculator work?

This calculator computes Gross Annual Value, NAV, Section 24(a) 30% deduction, Section 24(b) interest deduction, net taxable rental income, and income tax payable.

Fermor is a financial platform for India. Every calculator is free to use, and a free account is available to save your results and access them later. Fermor is building an automated financial action system using the Account Aggregator framework to connect real accounts and close the gap between knowing what to do with your money and actually doing it.

Rental Income Tax Calculator: Section 24 Deductions FY 2026-27

What Is Rental Income Tax?

Rental income tax in India is calculated under the head Income from House Property under Section 24 of the Income Tax Act, 1961, which provides a flat 30% standard deduction and home loan interest tax deductions.

Rent received from letting out residential or commercial property is taxable at your applicable income tax slab rate.

However, the Income Tax Act allows significant tax relief: municipal taxes actually paid are subtracted first, followed by an automatic 30% standard deduction for maintenance, plus interest paid on home loans used to purchase or construct the property.

Section 24 Deductions and Computation Rules

Here is the step-by-step mathematical breakdown for computing net taxable rental income:

Step-by-step Section 24 rental income tax computation for a Rs 35,000/month rented flat.
Computation Step	Formula / Legal Clause	Amount (Rs)
1. Gross Annual Value (GAV)	Actual Rent Received (Rs 35k × 12)	Rs 4,20,000
2. Less: Municipal Property Taxes Paid	Taxes paid to local body in FY	- Rs 15,000
3. Net Annual Value (NAV)	GAV minus Municipal Taxes	Rs 4,05,000
4. Less: Sec 24(a) 30% Standard Deduction	Flat 30% of NAV	- Rs 1,21,500
5. Less: Sec 24(b) Home Loan Interest	Actual Home Loan Interest Paid	- Rs 1,80,000
6. Net Taxable Rental Income	NAV - Std Ded - Loan Interest	Rs 1,03,500

How to Use This Rental Income Tax Calculator

Enter Monthly Rent: Input total monthly rent received from your tenant.
Enter Municipal Taxes: Input annual property taxes paid to municipal corporation.
Enter Home Loan Interest: Input total annual home loan interest paid.
Select Income Tax Slab: Choose your personal tax bracket (5%, 10%, 15%, 20%, or 30%).

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Frequently Asked Questions

Rental income is taxed under the head Income from House Property. Gross annual rent is reduced by municipal taxes paid, followed by a flat 30% standard deduction under Section 24(a) and home loan interest under Section 24(b).

Disclaimer: Rental income tax calculations follow provisions under Section 24 of the Income Tax Act, 1961. Set-off of house property losses under the New Tax Regime (Section 115BAC) should be verified with a qualified Chartered Accountant during ITR filing.