Finance

Tax on rental income in India

How rent is taxed, the 30% deduction, home-loan interest and which form to use.

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How is rent taxed?

Start with the rent for the year and subtract municipal taxes you paid. You then get a flat 30% deduction for repairs, whatever you actually spent, plus the interest on any loan for the property. What's left is added to your income and taxed at your slab rate.

How much home-loan interest can I deduct?

On a let-out property, all the interest can be deducted from its rent. If that creates a loss, the old regime lets you set off up to ₹2 lakh against other income and carry the rest forward for eight years; the new regime doesn't allow the set-off.

What if I own more than one home?

Up to two homes you live in can be treated as self-occupied, with no rent counted. From a third home onwards, tax is worked out as if it were let out.

Do tenants deduct TDS?

Individual tenants paying more than ₹50,000 a month must deduct 2% TDS from the rent. It shows in your Form 26AS and counts towards your tax.

Which ITR form do I file?

ITR-1 (or ITR-4 with presumptive business income) covers up to two house properties. With three or more, file ITR-2.

Rules for FY 2025-26 income, updated 23 September 2026. Section numbers are from the Income-tax Act 1961; the Income-tax Act 2025 renumbers them from FY 2026-27. This is general information, not tax advice.

Free tools for you

Which ITR form should I file?

Find out if you must file, and which form fits.

Home Loan EMI Calculator

See your EMI and total interest.

Loan Eligibility Calculator

Find out how much you could borrow.

HRA Exemption Calculator

For your tenants: how much HRA is tax-free.

Rent Receipt Generator

Receipts your tenant can give their employer.

Guides

Frequently asked questions

Is the 30% deduction on rent available in the new regime?
Yes. The 30% standard deduction on rental income applies in both the old and new regime.
Do I have to show rent from a property I own jointly?
Yes, your share of it. Each co-owner reports their share of the rent and claims their share of the deductions.