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Home›India›Rental Income Tax Calculator

Rental Income Tax Calculator India — FY 2025-26

Calculate exact tax on your rental income under "Income from House Property." Full Section 24 waterfall: GAV → NAV → 30% standard deduction → unlimited loan interest deduction → taxable income or loss. Model two properties, compute the ₹2 lakh loss set-off against salary, and find your cash-flow break-even rent.

Calculate tax on rental income under "Income from House Property" — Section 24 deductions
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Actual rent received per month from tenant
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Section 24(b): No upper limit for let-out property
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Property tax paid to municipality — deducted from GAV
months
Months property was vacant (0–12)
House property income is taxed at your marginal slab rate
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How to Use This Calculator

Rental Income Tax tab

Enter your monthly rent received, annual home loan interest, municipal taxes, and vacancy months. The calculator walks through the full Section 22–27 computation: GAV → NAV → standard deduction → interest deduction → taxable income or loss. If the result is a loss, it shows how much you can set off against salary and how much carries forward.

Multiple Properties tab

Model two properties simultaneously — Property 1 as self-occupied (no rent, interest capped at &rupee;2 lakh) and Property 2 as let-out (full deductions). See the combined "Income from House Property" figure, net loss set-off against salary (up to &rupee;2 lakh/year), and any carry-forward amount.

Rent vs Loan Break-Even tab

Enter your monthly rent and annual loan interest. The calculator shows your pre-tax cash flow, tax effect (including the 30% standard deduction and interest deduction), and post-tax cash flow per month. It answers: "Is my rental property cash-flow positive after tax?" and shows the break-even rent level where income exactly covers interest costs on a post-tax basis.

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Every input is encoded in the URL. Click Share to send your exact scenario to your CA, chartered accountant, or save it for reference during ITR filing.

The Formula — Income from House Property

Rental income in India is taxed under the head "Income from House Property" (Sections 22–27 of the Income Tax Act, 1961). The computation follows a fixed waterfall:

Step 1: Gross Annual Value (GAV)
GAV = Higher of (Actual Rent Received) or (Fair Rent / Expected Rent)
For rented property: GAV = Annual rent received (adjusted for vacancy)

Step 2: Net Annual Value (NAV)
NAV = GAV − Municipal Taxes Paid
(Municipal taxes must actually be paid in the year to be deductible)

Step 3: Standard Deduction — Section 24(a)
Standard Deduction = NAV × 30%
(Flat 30% — no bills, no proof required. Covers repairs, maintenance, insurance)

Step 4: Home Loan Interest — Section 24(b)
For let-out property: Interest deduction = Full loan interest (NO upper limit)
For self-occupied property: Interest deduction capped at &rupee;2,00,000

Step 5: Taxable Income / Loss
Taxable HP Income = NAV − Standard Deduction − Loan Interest
(If negative, it is a "Loss from House Property")

Step 6: Tax Payable
Tax = Taxable HP Income × Your Income Tax Slab Rate
+ 4% Health & Education Cess
(HP income is added to total income and taxed at your marginal slab rate)

Loss Set-Off Rule
Old regime: HP Loss can be set off against salary and other income: up to &rupee;2,00,000 per FY
New regime (Section 115BAC): HP Loss can ONLY be set off against other house property income, NOT against salary or other income
Remaining loss: Carry forward 8 assessment years (only vs future HP income)

Section 24(a) standard deduction (30%) and Section 24(b) interest deduction for let-out property are available in both old and new tax regime. However, the &rupee;2 lakh loss set-off against salary applies only under old regime. Under new regime, house property losses can only offset income from other house properties. The &rupee;2L interest cap for self-occupied property is also old regime only.

Example

Meera — Mumbai landlord, &rupee;30,000/month rent with &rupee;4 lakh loan interest

Meera owns a 2BHK flat in Pune which she rents out for &rupee;30,000/month. She pays &rupee;12,000/year in municipal taxes (property tax) and &rupee;4,00,000/year in home loan interest. She is in the 30% tax bracket. The flat was rented for all 12 months.

Step 1 & 2: GAV and NAV

Annual rent (GAV)&rupee;3,60,000
Less: Municipal taxes&rupee;12,000
Net Annual Value (NAV)&rupee;3,48,000

Step 3 & 4: Deductions under Section 24

Section 24(a): 30% of NAV&rupee;1,04,400
Section 24(b): Loan interest (unlimited)&rupee;4,00,000
Total deductions&rupee;5,04,400

Step 5: Taxable Income / Loss

NAV&rupee;3,48,000
Less: Total deductions&rupee;5,04,400
Loss from House Property&rupee;1,56,400

Tax Impact

HP loss set off against salary&rupee;1,56,400 (within &rupee;2L limit)
Tax saved at 30% slab + 4% cess&rupee;48,793
Carry-forward loss&rupee;0

Despite receiving &rupee;3.6 lakh rent, Meera's loan interest creates a house property loss of &rupee;1.56 lakh, which she sets off against her salary income — saving nearly &rupee;49,000 in tax. Without the loan interest deduction (e.g., if she had no loan), her taxable HP income would have been &rupee;2,43,600 and tax payable around &rupee;76,000.

FAQ

The 30% standard deduction under Section 24(a) is a flat statutory allowance designed to cover all expenses incidental to owning and renting a property — repairs, maintenance, painting, insurance, agent commissions, and collection charges. You do not need any bills or receipts. It is computed as 30% of NAV (not GAV). This deduction is mandatory: you cannot opt out of it, and you cannot claim actual expenses instead. For example, even if your repair bills are zero, the 30% deduction is still allowed. Conversely, if your actual repair costs exceed 30% of NAV, you still can only claim 30%.
Section 24(b) of the Income Tax Act allows a deduction for interest on home loan. For a self-occupied property, this deduction is capped at &rupee;2,00,000 per year (for loans taken on or after 1 April 1999 for construction/purchase, with certain conditions). However, for a let-out (rented) property, there is NO upper limit on the interest deduction. The logic is that for let-out property, the full income is being brought to tax (GAV → NAV), so the full interest cost is allowed as a deduction. This distinction is why many landlords with large loans show a "loss from house property" — the interest often exceeds the net rent after the 30% deduction.
When your "Income from House Property" is negative (a loss), the set-off rule depends on your tax regime. Old regime: you can set it off against salary, business income, or other heads — but only up to &rupee;2,00,000 per FY (limit introduced in Finance Act 2017). New regime (Section 115BAC): HP loss can ONLY be set off against income from other house properties, NOT against salary or other income. Under both regimes, any unabsorbed loss carries forward for up to 8 assessment years, but can only be set off against future HP income. This makes the choice of tax regime important for landlords with large loan interest.
If you own more than 2 residential properties, the Income Tax Act requires that all properties beyond the first two be treated as if they are rented out — this is called "deemed let-out." The expected rent (based on municipal valuation, fair rent, or standard rent — whichever is highest) is taken as the GAV, even if the property is actually vacant. You cannot claim zero income for a third or fourth property even if no tenant exists. From FY 2019-20, the limit was raised from 1 to 2 self-occupied properties (Section 23(4)). If you have 3 properties and none is rented, you can choose any 2 as self-occupied; the third will be taxed on its expected rent.
Yes — Section 24 deductions are available in both old and new tax regimes. The new regime (default from FY 2023-24 onwards) disallows most deductions like 80C, 80D, HRA, and LTA. However, Section 24(b) interest deduction for let-out property remains available even in the new regime. The 30% standard deduction under Section 24(a) is also available. The only exception is the ₹2 lakh interest cap on self-occupied property — in the new regime, this deduction for self-occupied property is not allowed. So if you have a let-out property with a home loan, you can claim full interest even in the new regime. If your property is self-occupied, the ₹2L deduction is only available under the old regime.

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