Calculate Income from House Property | Meaning, Steps and How To Save Calculate Income from House Property?

Calculate Income from House Property: Income from house properties can act as the money arriving from house properties, which is the self-occupied property of a particular person. This can be derived from the cash received by a person through rents. There’s a deduction of tax that happens in rental tax India of 2021-22 that is a 31.2 per cent compulsory deduction.

So there we can see a generation of income is happening towards the end possible for income from house property and much useful for people who need this adequate money to suffice and people who are not generally working and looking after themselves through these rental home issues.

It works for them too. Section 24 of loss from house property deals with the loss of a particular person, and deduction of money derived from two reasons first is because of self-occupied property. Second is under let out property loss of income. There are more to it we shall discuss.

Calculate Income from House Property in English

Meaning of “income from house property”

The income tax department has divided a person’s taxes from various sources, not just earning through 24*7. There are other ways in which income can be derived from income taxes; for example, one of the heads of it is “income from house property”. The income an individual will earn from being the head or the ownership of the house is said to be called income from house property.

For example, if I am a taxpayer and rent my home,, that home will be taxable. So it works this way. House rents are one of the most deliberate examples of income from house properties. There are more examples present under income from house properties, and they are shops, buildings, offices etc., be it residential or commercial. Any house or place which is getting a taxable amount is said to be called income from house property.

Taxability conditions of income from house property are

  1. An individual has to be the owner of the house. You cannot derive revenue from house property if you’re not the owner of the place. You have to have a vacant position for rental purposes, and then only it can be allowed for taxation.


  1. The properties for taxation conditions should comprise buildings or lands. It can be any residential houses, factory buildings or shops etc.
  2. According to the taxation law, this taxation can be the aim for using specific purposes except for business purposes. If the government sees it is used as the purpose of business, then the income will be let out and demarcated as the business taxation and not taxation from the payment of the house property. Thus, the residential buildings should and must be vacant but not used for business purposes which are against ethics.

Computation of the income from house property for income tax purposes?

The department of income tax differentiates your income via two different categories those are

Property that is self-occupied

A person when uses this kind of property or their use then this is known as the self-occupied property. There is more to it; this kind of property can be owned by relatives, or parents or anyone or self. If there is an unoccupied property lag behind, then it can be taxable from the income tax department and will be called a self-occupied property; this is solely for income tax return. For example, there’s a notion existed before the financial year of 2019-20 that if a taxpayer owns property more than one, then there will be consideration of only on the property of his own, and others will be considered as the let put properties.

After 2019-20 there is a changed rule that two properties of a particular person will be considered as self-occupied property.

Property that is let out

This is nothing but a rental system of income of house property. Any property which is rented for more than a year or so is said to be let out the property for income tax issues. Properties that are none inherited property that can be inherited from grandparents, parents etc.,

will be considered to be either property let out or self-occupied property depending on the work they are dealing which is listed above.

Steps of evaluation of “income from house property”?

There are various steps in which we can calculate the income from house properties.

Understanding the GAV that is the gross annual value of the property.

The value of the gross annual value of the property of the self-occupied property is nil, which has no statement because self-occupied properties are needless to have taxation.

But the let put property’s gross annual value is calculated through the same property which self-occupied person is giving the others and taking the money through rents.

Reduction of property tax or municipal taxes

This is nothing, but when a person is paying all his taxes, there’s another certain amount of tax he has to pay which is called municipal or property tax, and when these taxes are deducted annually from the gross annual value, it is said to be known the reduction of municipal or property tax.

Net annual value determination

This is nothing but the taxes of property that is being reduced from the annual gross value, so now the net value that is obtained via it is known as the net value determination.

30℅ standard deductions from the amount of net annual value.

When from a person’s division, 30℅ of income is deducted, and that is allowed to be deducted from the net annual gross, which is NAV under the act of income tax; this is removed because it works as a rebate or refund or compensation.

After all, partially, a man or woman has paid too much taxes, so above 30℅ reductions, there is a relief granted by the income tax department in the field of repair, reconstruction or painting.

Home interest loan deduction

If the person has taken a home loan they have to pay interest rates every month during the financial year and that house loan is assisted to be deducted under the income tax act of section 24.

Final income of the house property.

The final value or income that arrives is your income from house property.

How to save taxes on income from house property?

Taxes sometimes act as a huge pain when the amount is significant and not affordable or convenient so there are many ways in which taxes can’t adjourn quickly.

Becoming co-partners

As I’ve mentioned taxes are pretty harsh to people at times. But if you allow your other half which is your husband or wife to deal with the situation and become co-owners and pay taxes accordingly so you can split the murder together and share the amount of interest. This helps when a person has taken home loans or something.

Registration of second home in someone else’s name.

This happens when you’re future planning and has taken registered property or land in your name but you purchased another name and now it is being a problem for you when you have to pay the taxes so you can register the name in either your relatives or husband/wife so you’ll get a relief from giving taxes.

In this scenario, you have two properties of your own being registered one to you and the other to someone else and you’re getting relief from heavy taxation.

Vacancy of homes

It is good too until we have something vacant. Vacancy of property deals with the rental action of a property when it is empty. For example, if I have a self-occupied property then it can be given on rent to subsidies money out of it. It will fix other tax-related crises one is dealing with.

Receiving rent from a person you’ve provided to help you gulp your problem and then you can freely give your taxes.

Multiple property ownership

This is nothing but ownership granted for more than two properties assigned by the person. For example, the two properties he holds are his self-occupied property according to the 2019-20 acts but after that, it gets let out property. So this particular person must evaluate his liability of taxes of all lands that they are permitted to give.

So that in the case of crisis he might change his property ownership to other land and reevaluate the taxes. We can change our own every year as such so he or we can save ourselves from tax burdens.


Therefore, we can end this note here by saying that it will be a better option if we get proper knowledge of the factors relating to land or property owning. It’s a lifetime asset if we use it in accordance. We can plan things strategically to use in times of need. It can be an approaching proactive method for your investment in future.

In individual ownership, we should maintain and keep and mind fact that how many lands we have purchased and the assessment of liability out of it’s we are getting. For the best interest, we can have joint ownership to get out of the tax burden.

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