Rental income is within the scope of “income from House of Representatives property” in accordance with the Income Tax Act. These laws involve certain deductions that can be used to reduce taxable income.
Standard deduction: Under Section 24A of the Income Tax Act of 1961, a standard deduction of 30% on net annual value is permitted by the government. They are intended to cover repair and maintenance costs to reduce the financial burden on property owners.
Local tax: Local taxes such as fixed asset taxes can be deducted from the annual income of assets under the Income Tax Act. However, this deduction cannot be charged by the tenant and is permitted if taxes are paid by the owner.
Vacancy period: If the property is vacant for some or throughout the fiscal year and the actual rent is lower than expected due to the vacancy, the rent reduction will be considered as the total annual value in accordance with tax rules.
“…Because of such vacancies, the associated owner has received or the owner has received is less than the actual rent (if reduced by the vacant allowance), so it is considered the annual total of the property.”
Joint Ownership: If the property is jointly owned, each owner may request another deduction based on the share of the property. For example, if a couple owns a house together and rents it, they can split the rental income between themselves, each of which can pay taxes on the stocks of their individual income.
Section 80C: Mortgage repayments up to Rs 1,50,000 are deductible under Section 80C of the IT Act, whether the property is owned or leased.
Depreciation: The taxation rules do not provide a direct deduction for depreciation based on “income from House property.” However, if the property is part of your business assets, especially for commercial properties, you can claim a depreciation deduction.
