Tax · Free tool
Income From House Property
For self-occupied: NAV is zero, deduct home loan interest up to ₹2 lakh under section 24(b). For let-out: rent − municipal taxes = NAV, then 30% standard deduction + full interest. Loss capped at ₹2 lakh for set-off against other heads.
Capped at ₹2 lakh for self-occupied.
How the calculation works
Start with Gross Annual Value = higher of expected rent (municipal value / fair rent) and actual rent received. Deduct municipal taxes actually paid → Net Annual Value (NAV). From NAV, subtract a flat 30% standard deduction under section 24(a) plus the full interest on home loan under 24(b). The result, positive or negative, is your income from house property.
Worked example — let-out flat
A Pune flat let out for ₹35,000/month = ₹4,20,000 annual rent. Municipal tax ₹15,000. NAV = ₹4,05,000. Standard deduction 30% = ₹1,21,500. Home-loan interest ₹3,80,000. Taxable income = 4,05,000 − 1,21,500 − 3,80,000 = −₹96,500 (loss), set off against salary income (capped at ₹2 lakh under section 71(3A)). At 30% slab that's ~₹29,000 tax saving.
Self-occupied vs let-out rules
- Self-occupied — NAV deemed zero; interest deduction capped at ₹2 lakh
- Let-out — actual rent − muni tax − 30% std − full interest; loss capped at ₹2L for set-off
- 2 self-occupied houses allowed since FY 2019-20 (Budget 2019)
- Vacant 3rd house — deemed let-out, notional rent taxable
- Old regime only — new regime allows interest deduction only against rental income, not salary
Pair with our income tax calculator and HRA calculator for the full picture if you own one house and rent another.
FAQ
Can I claim two self-occupied properties?
Yes — Budget 2019 allowed two properties as "self-occupied", both with NAV = 0 and combined home loan interest deduction up to ₹2L. Beyond two: deemed let-out, with notional rent.
How do I treat my under-construction property?
No deduction during construction. Once you take possession, pre-construction interest is allowed in 5 equal instalments along with current-year interest, capped at ₹2L total for self-occupied.
Can I set off house property loss against salary?
Yes, up to ₹2 lakh per year against any other head (salary, business, capital gains). The remaining loss is carried forward for 8 years to set off only against future house property income.