1. What is Rental Income Tax?

Rental income tax is the tax levied on income earned from renting out property in India. For Assessment Year 2024-25, rental income is taxed under the head "Income from House Property" with specific deductions and allowances.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( Rental\ Income \) — Gross rental income received
• \( Allowances \) — Standard deduction (30% of NAV) and other allowances
• \( Expenses \) — Deductible expenses like municipal taxes, interest on home loan
• \( Tax\ Rate \) — Applicable income tax slab rate

3. Important Components

Standard Deduction: 30% of Net Annual Value (NAV) is automatically deductible under Section 24.
Municipal Taxes: Paid municipal taxes can be deducted from gross annual value.
Home Loan Interest: Deduction up to ₹2 lakh for self-occupied property under Section 24(b).

4. Using the Calculator

Tips: Enter gross rental income in INR, applicable allowances (standard 30% deduction is automatic), any additional deductible expenses, and your applicable tax rate based on your income slab.

5. Frequently Asked Questions (FAQ)

Q1: What is the standard deduction for rental income?
A: 30% of Net Annual Value is automatically deductible for repairs and maintenance under Section 24(a).

Q2: Can I deduct home loan interest?
A: Yes, interest on home loan is deductible up to ₹2 lakh for self-occupied property under Section 24(b).

Q3: Are municipal taxes deductible?
A: Yes, municipal taxes paid during the year can be deducted from gross annual value.

Q4: What if the property is jointly owned?
A: Rental income and deductions are divided according to ownership share.

Q5: How is vacant property taxed?
A: Even if vacant, notional rent may be taxable if property is deemed to be let out.