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Taxable income from a let out house is rent less municipal tax paid, then 30% standard deduction, then home loan interest. There is no deduction for actual repairs or maintenance. The result can be income or loss.
ITR
Computing income from a rented flat
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Provisions
Sec 22 (now Sec 20); Sec 24(a) (now Sec 22(1)(a)); Sec 24(b) (now Sec 22(1)(b))
Analysis
Annual rent is ₹3,00,000; minus ₹12,000 property tax gives net annual value of ₹2,88,000. The 30% deduction under Sec 24(a) is ₹86,400 and interest under Sec 24(b) is ₹1,80,000, so income is ₹21,600. Society maintenance and repairs are already covered by the 30%. Show tenant details in Schedule HP.
Close
- Total the rent received for the year.
- Deduct municipal tax actually paid.
- Take 30% of the balance and the year's loan interest.
- Enter the result in Schedule HP.
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