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House Rental Income Tax – India (as of 2025)

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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