Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
Open DEMAT Account with in 24 Hrs and start investing now!
Service Tax »
Open DEMAT Account in 24 hrs
 ITR 3 What is ITR 3 Form & How to File ITR-3?
 ITR Filing 2024: How To Claim Tax Refund Online, Check Step-by-step Guide To Know Status
 Income tax return filing for FY23-24: Check details of Form 16 issue date, ITR forms
 How to maximize tax benefits for senior citizens in India
 Income tax return filing: ITR filing 2024 date is upon us, but should you rush to file?
 Income Tax Return AY 2024-25: ITR-1, ITR-2, ITR-4 Enabled for Online Filing; Check Details
 New Tax Regime: What Is It? How Can You Opt For It? Comparison With Old One
 6 Ways to Save Income Tax On New & Old Tax Regime for FY 2023-24
 Income Tax SFT return filing due date extension: Facility to remain open for a couple of days Latest news
 Income tax filing: Waiting for your Form 16? Here is what you need to know
 Salaried? Rental tax calculation rules you should know before ITR filing in 2023

How much income tax is payable on rental income
May, 15th 2019

There have been a number of income sources and expense heads which are required to be evaluated at the time of calculating the total income tax liability. In order to assess the accurate income tax liability at the time of filing income tax returns, a user has to calculate the total earnings in a particular financial year or an assessment year. The income from salary, investments, interest earned on deposits, capital gains on equity and equity-related investment and income earned from rental property are some of the most common sources of income.

The income earned from the rental house or any other tangible real estate asset has to be collated to assess the taxable portion of the income. Further, the tax rate applicable to the income from a rental property is subject to the assessee, i.e., under which tax slab the assessee is falling.

The income from property which is let out throughout a year can be calculated by assessing the effective income from the house property by subtracting ‘municipal taxes paid during the year’, ‘deduction under Section 24’, ‘deduction under Section 24(a) at the rate of 30 per cent’ and ‘deduction under Section 24(b) on account of interest paid on borrowed capital’ from the ‘gross annual value of property’.

The gross annual value of the property can be calculated by computing reasonable expected rent of the property and the actual rent of the property let-out throughout a year. Following the calculation of the aforementioned calculations, the total rental income is added to the annual income and is taxed accordingly with the respective income tax slabs.

According to the Income Tax Department, the rental income in the hands of the owner is charged to tax under the head “income from house property”. Rental income of a person other than the owner cannot be charged to tax under the head “income from house property”. Hence, rental income received by a tenant from subletting cannot be charged to tax under the head “income from house property”. Such income is taxable under the head “income from other sources” or profits and gains from business or profession.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting