Calculate exact income tax on your rental income for FY 2025-26. Includes 30% standard deduction, home loan interest (Section 24), municipal tax, TDS, and old vs new regime comparison.
Rental income in India is taxed under "Income from House Property." The tax rules allow significant deductions — a flat 30% standard deduction plus municipal tax paid, and home loan interest (in old regime). This means your effective tax on rental income can be much lower than your slab rate.
If your annual rent exceeds ₹2.4L (₹20,000/month), the tenant must deduct TDS at 10% under Section 194-I. For individuals/HUF tenants, TDS is at 5% under 194-IB if monthly rent exceeds ₹50,000. The TDS is deposited with the government and you get credit for it against your final tax liability. If TDS exceeds your tax, you get a refund.
In the old regime, yes — there is no cap on interest deduction under Section 24(b) for a let-out property (unlike self-occupied where cap is ₹2L). However, if the deduction results in a loss under "House Property," it can only be set off against other income up to ₹2L per year; the balance is carried forward for 8 years. In the new regime, the ₹2L cap applies even for let-out property from FY 2024-25.
ITR-1 (Sahaj) if total income is under ₹50L and only one rental property. ITR-2 for two or more properties, or if income exceeds ₹50L, or if you have capital gains. ITR-3 if you have business income in addition. Always disclose rental income even if TDS has been deducted — non-disclosure is a high-risk area for scrutiny.
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