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Deductions that can be Claimed on a rental property

what can be claimed for taxes

Robotax India Inc.


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Maintaining a rental home is a challenge; dealing with tenant, government institutions, electricity, water supply and other day to day issues. Finally comes the tax man. Most of us are not aware of the deductions that can be claimed on your rental income which could in turn reduce your taxes. Here are a few that could help reduce your taxes

1) Unrealized rent

If you have any unrealized rent (rent that you did not receive) in previous year. it can be claimed as a deduction from your rent this year.

2) Taxes paid to local bodies

Property tax paid to local bodies such as municipality / corporation / panchayat can be claimed as a deduction.

3) Principal Paid on housing loan

The principal paid on your housing loan can be claimed as a deduction under Section 80 C up to Rs.1,00,000

4) Interest Paid on housing loan

The interest paid on your housing loan can be claimed as a deduction in full.

5) Set off against salary income

During the first few years you might pay more interest on your housing loan. At times it might even exceed the actual income from the house. resulting in a loss. In such cases you can set off the losses from your house property against your salary income. For example, if your taxable income is Rs.5,00,000 and the loss incurred from your house property is Rs.50,000, then your taxable income is only Rs.4,50,000.

6) Standard 30% deduction

Finally you can deduct 30% of your rental income as a standard deduction. This is to handle all miscellaneous expenses you might have spent on maintaining the property.

Narayan has an apartment in Bangalore which he has rented out. Let’s see a scenario how his taxable income is calculated by claiming his eligible deduction.

Category: Taxes

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