House Rental Income Tax – India (as of 2025)
1. Rental Income is Taxable
- If you own a house and earn rent from it, that income falls under “Income from House Property” in the Income Tax Act.
- The rent you receive (after certain deductions) is added to your annual income and taxed according to your income tax slab.
2. How Tax is Calculated
- Gross Annual Value (GAV): Total rent received in a year.
- Less: Property tax actually paid to local bodies.
- Less: Standard deduction of 30% (flat, irrespective of actual expenses).
- Less: Deduction on home loan interest (if any, up to ₹2,00,000 for self-occupied, unlimited for let-out properties).
➡️ The balance amount is your Taxable Rental Income.
3. Example
Suppose you rent out your house in Chittoor for ₹16,000/month:
- Annual Rent = ₹1,92,000
- Less: 30% Standard Deduction = ₹57,600
- Taxable Income = ₹1,34,400 (added to your total income and taxed as per slab).
4. TDS (Tax Deducted at Source)
- If the monthly rent exceeds ₹50,000, the tenant must deduct 5% TDS and deposit it with the government.
- For ₹16,000/month (your case), no TDS is applicable.
5. GST on Rent
- Residential house rent for personal use → No GST.
- Commercial property rent or residential rented to a business entity (for office use) → GST @ 18% may apply.
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