GST & Tax Tools
House Property Income Calculator
Calculate taxable income from let-out or self-occupied property under old tax regime.
This tool provides an estimate or a starting draft. Check the assumptions and current official requirements before relying on the result. It does not replace qualified financial, legal or medical advice.
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Income from House Property is one of five heads of income under the Indian Income Tax Act. It covers income from buildings and land appurtenant thereto. Even if you do not physically receive rent — if you own more than one property — one is treated as self-occupied and all others are deemed to be let out at 'Annual Lettable Value' (ALV = fair market rent). This means owning two flats without renting either still generates deemed taxable income under this head, though you can designate which one is self-occupied.
For a let-out property: Gross Annual Value (GAV) = higher of actual rent received or Annual Lettable Value. Deduct municipal taxes paid during the year to arrive at Net Annual Value (NAV). From NAV: (a) Standard deduction of 30% of NAV (no bills required, covers repairs/maintenance/depreciation); (b) Interest on housing loan under Section 24b — uncapped for let-out property, the entire interest is deductible even if it creates a loss. The resulting figure (positive or negative) is Income from House Property.
For self-occupied property: GAV is taken as nil, so NAV is also nil (after municipal taxes). Only Section 24b interest deduction applies, capped at ₹2L per year. This often creates a loss of ₹2L from house property, which can be set off against other income (salary) in the same year, reducing taxable income. Under the new tax regime (115BAC), even this ₹2L interest deduction for self-occupied property is not available — this is a major consideration when choosing between regimes for home loan borrowers.
How to use this utility
- Use the controls below—paste text, pick files, or adjust options as described on the tool.
- Click the main action button. Processing runs in your browser on this device.
- Download or copy the output. Check the processing note for any external services used by this operation.
Common use cases
- Calculating tax on rental income from a flat rented at ₹22,000/month after standard deduction and home loan interest
- Determining deemed rental income on second property that is vacant but owned, to compute tax liability
- Claiming the ₹2L interest deduction on a self-occupied home to reduce salary tax through set-off
- Filing ITR when let-out property has a loss (interest exceeds rent) and understanding carry-forward rules
- Deciding between old and new tax regime factoring in loss from house property set-off benefit
Tips for best results
- 1Claim municipal property tax paid as deduction from GAV — many property owners forget this step, which reduces NAV before applying the 30% standard deduction
- 2Under the old regime, a ₹2L loss from self-occupied property can be set off against salary — a person in 30% bracket saves ₹62,000 in tax annually from this alone
- 3Losses from house property (beyond ₹2L set-off limit) can be carried forward for 8 assessment years and set off against future house property income
- 4For NRI owners with let-out property in India, TDS at 30% (+surcharge+cess) is mandatory for Indian tenants — ensure tenants deduct and deposit this
- 5In new tax regime, you lose the ₹2L interest benefit for self-occupied property — this single deduction often makes the old regime better for those with home loans above ₹25L
Frequently asked questions
- Is Konnect2Tools free?
- Yes. These in-browser tools are completely free to use with no account required for core functionality.
- Do my files leave my device?
- Browser document operations run locally, except where the operation uses an external service, such as AI summarisation. Read the processing note before using sensitive inputs.
- Is the House Property Income Calculator tool safe to use?
- Local operations process document content on your device. External-service operations may send inputs as described in the processing note. Keep originals and inspect the output.
- How is rental income taxed when there is an outstanding home loan?
- For a let-out property with home loan: (1) Compute NAV (Actual rent - Municipal taxes); (2) Deduct 30% standard deduction; (3) Deduct entire home loan interest under Section 24b (no ceiling for let-out property). If interest is ₹8L and rent income net of standard deduction is ₹3L, you have a loss of ₹5L from house property. Under the old regime: only ₹2L of this loss can be set off against other income in the current year; remaining ₹3L is carried forward. Under new regime: no set-off of house property loss against other income (except salary offset for self-occupied not available either).
- What is Annual Lettable Value for vacant/self-occupied properties?
- Annual Lettable Value (ALV) is the expected rent the property would fetch if let out — typically determined by the Municipal Ratable Value or fair market rent. For self-occupied properties: ALV is taken as nil by election — no income from house property arises. For vacant properties beyond one: deemed let-out at ALV even if actually vacant. For actually let-out properties: GAV = higher of (actual rent) or (ALV). If actual rent is lower than ALV due to genuine circumstances (property partly vacant, tenant relation), you must still declare ALV as income — this is a common source of errors in ITR filing.
- Can I have negative income from house property?
- Yes — negative Income from House Property arises commonly when home loan interest exceeds rental income. For let-out property: if interest (say ₹9L) far exceeds rent (say ₹3.6L net of 30% standard deduction), the loss is ₹5.4L. Of this, only ₹2L can be set off against salary/other income in the current year; ₹3.4L is carried forward for up to 8 years to be set off only against future house property income. Under new tax regime, even the ₹2L set-off is unavailable — all house property loss is ring-fenced and carried forward (but only against house property income in future years).
- How many properties can I declare as self-occupied?
- Only one property can be declared self-occupied (GAV = nil). For individuals/HUFs with more than one property, you choose which single property is self-occupied; all others are deemed let out. Exception: if both properties are self-occupied (owner staying in one and unable to travel to second due to employment, business, or profession in another city), both can be claimed as self-occupied. This exception is commonly claimed by government employees posted to different cities. The ₹2L interest deduction under Section 24b applies separately to each self-occupied property if the exception applies.
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