Deductions Allowable from House Property Income

  • Municipal tax levied by local authority and borne by owner in respect of house property ( For let out properties only )
    First proviso to section 23(1)

    Exemption : Amount actually paid during the relevant previous year

    Available to : All Assessee

  • Standard Deduction
    ( For let out properties only )
    Section 24(a)

    Exemption : 30% of the Annual Value (Gross Annual Value- Municipal Taxes)

    Available to : All Assessee

  • Interest incurred on borrowed capital after acquisition / Construction
    Section 24(b)

    Exemption : The maximum tax deduction for accrued interest during the year for a self-occupied property acquired, constructed, repaired, renewed or reconstructed with borrowed capital and aquired / constructed within 3 years from the end of financial year in which the loan was taken, is allowed upto a maximum limit of ₹ 2 Lakhs.

    Where an assessee owns more than one house property, only one house property at the assessee's option is treated as self-occupied. Other house property(ies) is/are treated as let out.

    Where a house property is let during during the whole or any part of the previous year or any other benefit therefrom is derived by the owner, the house property is not treated as self-occupied.

    If the property is not acquired/constructed completed within 3 years from the end of financial year in which the loan was taken, the maximum deduction for accrued interest is reduced to Rs 30,000/- only. This limit of 3 years has been increased to 5 years from Financial Year 2016-17 and onwards.

    Available to : All Assessee

  • Deduction in respect of Interest for Pre-construction Period
    Section 24(b)

    Exemption : The interest payable by an assessee in respect of funds borrowed for the aquisition / construction of a house property and pertaining to the period prior to the previous year in which such property has been aquired of constructed, to the extent it is is not allowed as a deduction under any other provison of Income Tax Act, will be deducted in five equal installments commencing from the previous year in which the property is aquired or constructed.

    Available to : All Assessee

  • Standard Deduction from arrears of rent or unrealized rent received subsequently
    Section 25A

    Exemption : 30% of arrears of rent or unrealized rent.

    Available to : All Assessee

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