2 Replies to “How does calculate house tax under the head income from house propety?”

  1. no tax calculation of let out house also comes under house property head untill and unless u have bussiness of giving houses on rent etc…it goes like dis…take higher of rent received or fair rental value of d house..now deduct standard deduction of 30% of d value u got in previous step..and also deduct interest on house loan if any…dis will give u taxable hp income,,

  2. Rental income from let out house will be treated as “income from house property” if letting out the house is NOT a business for the assesses. i.e if you have a vacant house and you are letting out it and earns rent, the rental income is taxable under “income from house property”.

    In this case the computation will be:

    Gross Annual value (Higher of actual rent received and fair value)
    Less. Municipal Tax paid by landlord (if any)

    Annual value
    Less. Deductions u/s 24

    Standard Deduction @ 30% of annual value
    Interest on housing loan

    Income from house property

    On the other hand, if you are in a business of letting out properties, then the rental income earned is treated as “business income”.

    In this case, the rental income will be the revenue and all expenses related to earning the rent will be deducted to get the net profit/(loss) which is taxable.

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