Rental income tax calculator (India, FY 2026-27)
Rent is not taxed on the rent. It is taxed on what is left after municipal taxes, a flat 30% deduction, and your home loan interest — and that gap is large enough that plenty of landlords with a loan owe nothing at all on a property that collects ₹30,000 a month.
The calculator shows the whole working, in the order the return asks for it.
₹67,800 is added to your total income under Income from House Property. The 30% standard deduction is automatic — you get it whether or not you spent anything on repairs, and you cannot claim actual repair costs on top of it. Both regimes treat this the same way; the regime only matters once the result is a loss.
Runs entirely in your browser. Nothing is sent to us or stored. Computes income under one head for a let-out property — not your whole tax bill. A guide for planning, not tax advice.
The four lines that decide it
Gross annual value. For most small landlords this is simply the rent actually received in the year. It is not the rent you hoped for or the market rate.
Municipal taxes. Deductible, but only what you actually paid during the year, and only if you bore it rather than the tenant. This is one of the few genuine pieces of timing control a landlord has — paying before 31 March rather than after moves the deduction into this year.
The 30% standard deduction. Automatic, unconditional, and the most misunderstood line in the computation. You get 30% of the net annual value whether you spent nothing on the property or repainted the whole flat. Which is exactly why you cannot claim actual repair costs on top — the 30% is deemed to cover them.
Home loan interest, section 24(b). For a let-out property the entire year’s interest is deductible, with no cap, in both regimes. The ₹2 lakh figure people remember is the cap for a self-occupied property — a different situation.
Where the regimes actually differ
Both regimes compute this head identically. The 30% deduction and the full interest are available in each. The difference appears only when the answer comes out negative:
| Old regime | New regime | |
|---|---|---|
| 30% standard deduction | Yes | Yes |
| Interest on a let-out property | Full, no cap | Full, no cap |
| Loss set off against salary / other income | Up to ₹2 lakh a year | Not allowed at all |
| Loss carried forward | Up to 8 years, vs house property income | Up to 8 years, vs house property income |
That single row is worth real money. A landlord with a loss of ₹2 lakh or more offsets ₹2 lakh against salary under the old regime — roughly ₹62,400 at a 30% marginal rate with cess. Under the new regime they offset nothing this year and wait, possibly years, for enough house property income to absorb it.
That is not an argument for the old regime on its own. The new regime has lower slab rates, and for most people that outweighs this. But it is a real cost that belongs in the comparison, and it is the part landlords with a home loan most often miss. Our full guide to saving tax on rental income covers the rest of the levers.
Frequently asked questions
How is tax on rental income calculated in India?
Rent is taxed under the head Income from House Property. Start with the gross annual value, which for most landlords is the rent actually received. Subtract municipal taxes you actually paid during the year to get the net annual value. From that, subtract a flat 30% standard deduction under section 24(a), then the full home loan interest for the year under section 24(b). What remains is added to your total income and taxed at your slab rate.
What is the 30% standard deduction on rental income?
Section 24(a) allows a flat 30% of the net annual value as a deduction for repairs and maintenance. It is automatic and unconditional: you get it whether you spent nothing or a great deal. The corollary catches people out — you cannot claim actual repair, painting or maintenance costs on top of it, because the 30% is deemed to cover them.
Can I deduct the full home loan interest on a rented property?
Yes. For a let-out property the entire interest for the year is deductible under section 24(b), with no upper limit, in both the old and the new regime. The ₹2 lakh cap people remember applies to a self-occupied property, not a let-out one. What is limited for a let-out property is how much of a resulting loss you can set off against other income.
What happens if my rental income is a loss?
It depends on your regime, and this is the biggest practical difference between them. Under the old regime you may set off up to ₹2 lakh of house property loss against salary and other income in the same year, carrying the excess forward for up to 8 years. Under the new regime you may not set any of it against other heads — the entire loss carries forward for up to 8 years and can only be used against house property income.
Is the new tax regime worse for landlords with a home loan?
On this specific point, often yes. The new regime still gives you the 30% deduction and the full interest deduction on a let-out property, so the head is computed identically. But if that computation produces a loss, the old regime lets up to ₹2 lakh of it reduce your salary this year while the new regime lets none of it. At a 30% marginal rate that difference is worth roughly ₹62,400 in a year. Weigh it against the new regime's lower slab rates rather than deciding on either point alone.
Do I pay tax on rent if the property was vacant part of the year?
You are taxed on what you actually received. If a property was let for part of the year, the gross annual value reflects the rent for those months, which is why this calculator asks how many months it was let. Vacancy and genuinely unrealised rent have their own relief provisions, so a long vacancy or a defaulting tenant is worth discussing with a CA.
Is municipal tax deductible from rental income?
Yes, but only what you actually paid during the year, and only if you as owner bore it rather than the tenant. It is deducted from the gross annual value before the 30% standard deduction is applied — so paying it before the year ends, rather than after, is one of the few pieces of genuine timing control a landlord has.
This computation is only as good as your records
Every figure above comes from things you should already have: rent actually received, months let, municipal tax receipts. Nestwise keeps that per property and per co-owner through the year and produces an FY-based income statement at the end of it, so March is a download rather than a reconstruction. Free while in early access.
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