Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The three deductions
From your annual rent you subtract, in order: municipal taxes you actually paid in the year; then a flat 30% standard deduction under Section 24(a) on the balance; and the home-loan interest under Section 24(b). The result is your taxable house-property income.
What the 30% does and doesn't cover
The 30% standard deduction is a notional allowance for repairs, maintenance and collection — you get it in full even if you spent nothing, but equally you cannot claim actual repair bills separately. Items like brokerage to find a tenant are also not separately deductible. Only municipal taxes and loan interest are deductible besides the 30%. Confirm the current rules per the Finance Act.
A worked example
Example: rent ₹4 lakh, municipal tax ₹25,000, home-loan interest ₹1.5 lakh. Net Annual Value = ₹3.75 lakh; less 30% (₹1,12,500) = ₹2,62,500; less interest ₹1.5 lakh = ₹1,12,500 taxable. Even if you spent ₹60,000 on painting, you still only get the 30% — not the ₹60,000. Our team can compute your house-property income.