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For individualsRates reviewed September 2026

Income from House Property Calculator for FY 2026-27

This house property calculator works out the income or loss from a house for FY 2026-27 (tax year 2026-27) under the Income-tax Act, 2025, which moved the head from sections 22 to 27 of the 1961 Act into sections 20 to 25. The arithmetic has not changed: gross annual value, less the municipal taxes actually paid, gives the net annual value, and from that you deduct a flat 30 percent and the interest on borrowed capital.

A self-occupied house is taken at a nil annual value under section 21(6). From AY 2026-27 you may claim two houses that way, and the old condition that you had to be living elsewhere for work has gone. With a nil annual value there is no municipal tax deduction and no 30 percent allowance, so interest is the only deduction, capped at ₹2,00,000 by sections 22(2) and 22(5) where the loan was taken to buy or build and construction finished within five years, and at ₹30,000 in any other case.

A let-out property gets the full 30 percent and interest with no ceiling at all, which is how a loss arises. Section 109(1)(b) (section 71(3A)) then allows only ₹2,00,000 of that loss to be set against salary or any other head in the year, and section 110 (section 71B) carries the balance forward for eight tax years against house property income alone. Under the default new regime in section 202 (section 115BAC) there is no self-occupied interest deduction and no set-off against another head.

House Property Income Calculator

A self-occupied house has a nil annual value, so only the interest is deductible.

The higher of the actual rent and the expected rent, which is the gross annual value.

₹

Deductible only when actually paid by the owner, and only against a let-out property.

₹

Interest accrued for the year, whether or not it has been paid.

₹

Interest for the years before completion, allowed in five equal instalments from the year of completion.

₹

The new regime allows no interest on a self-occupied house and no set-off of the loss against other heads.

Loss from house property

₹2,75,000

₹2,00,000 set off this year, ₹75,000 carried forward

Gross annual valuethe higher of actual rent and expected rent
₹4,80,000
Municipal taxes paidallowed on a paid basis only, and only if borne by the owner
₹-30,000
Net annual value
₹4,50,000
Standard deduction at 30%a flat allowance for repairs, whatever the actual spend
₹-1,35,000
Interest on borrowed capitalinterest accrued for the year
₹-5,40,000
Pre-construction interest, one of 5 instalmentsone fifth of ₹2,50,000
₹-50,000
Interest actually allowedno ceiling on interest for a let-out property
₹5,90,000
Loss from house propertybefore the set-off cap
₹2,75,000
Loss set off against other headscapped at ₹2,00,000 a year
₹2,00,000
Loss carried forwardset against house property income only, for up to 8 tax years
₹75,000
  • Figures are for FY 2026-27 (tax year 2026-27) under the Income-tax Act, 2025, which renumbered sections 22 to 27 of the 1961 Act as sections 20 to 25.
  • The 30% standard deduction under section 22(1)(a) (section 24(a)) is computed on the net annual value, so paying more municipal tax reduces it.
  • Section 109(1)(b) (section 71(3A)) allows only ₹2,00,000 of the loss to be set off this year; the balance of ₹75,000 is carried forward under section 110 (section 71B).

The formula

Income from house property = Gross annual value − Municipal taxes paid − 30% of net annual value − Interest on borrowed capital

Gross annual value
The higher of the sum for which the property might reasonably be expected to let and the actual rent received or receivable. Nil for a self-occupied house.
Municipal taxes
Taxes levied by a local authority, deductible only in the year the owner actually pays them, whichever year they relate to.
Standard deduction
A flat 30 percent of the net annual value under section 22(1)(a) (section 24(a)), allowed instead of any claim for repairs, insurance or collection charges.
Interest on borrowed capital
Interest payable for the year under section 22(1)(b) (section 24(b)), uncapped for a let-out property and ₹2,00,000 or ₹30,000 for a self-occupied one.
Pre-construction interest
Interest for the years before the property was ready, allowed under section 22(1)(c) in five equal instalments from the year of acquisition or construction.

The 30 percent is computed on the net annual value, not the gross, so paying a higher municipal tax lowers the standard deduction as well.

How to calculate it

  1. 1

    Fix the annual value

    For a let-out house take the higher of the rent it might reasonably fetch and the rent actually received or receivable. For a self-occupied house, or a second one you have chosen under section 21(6), the annual value is nil. A house actually let at any time during the year cannot be claimed as self-occupied for that year.

  2. 2

    Deduct the municipal taxes you actually paid

    Only taxes levied by a local authority, borne by the owner and actually paid during the year come off the gross annual value. Taxes billed but unpaid at the year end are not deductible, and taxes borne by the tenant never are. What is left is the net annual value.

  3. 3

    Take the 30 percent standard deduction

    Deduct a flat 30 percent of the net annual value. It is a statutory allowance, not a reimbursement, so it is the same whether you spent nothing on the property or far more than 30 percent. No separate claim for repairs, insurance, electricity, water or security is allowed on top of it.

  4. 4

    Claim the interest, and the pre-construction instalment with it

    Interest payable for the year is deductible whether or not it has been paid. Interest for the period before the property was acquired or constructed is claimed separately in five equal annual instalments beginning with the year of completion, so a fifth of that accumulated interest is added to the current year's claim.

  5. 5

    Apply the interest ceiling for a self-occupied house

    For a house at nil annual value the interest deduction is limited to ₹2,00,000 where the money was borrowed to buy or build and construction was completed within five years from the end of the tax year of borrowing, with a lender's certificate. Otherwise, and for a loan taken to repair, renew or reconstruct, the limit is ₹30,000. The ₹2,00,000 is an overall ceiling across both self-occupied houses.

  6. 6

    Set off the loss and carry the rest forward

    A loss under this head can be set against income under any other head only to the extent of ₹2,00,000 in the year. Whatever is left is carried forward for up to eight tax years and can then be set only against house property income. Under the new regime the loss cannot be set against another head at all.

Deductions under the head house property for FY 2026-27 (tax year 2026-27)

Deductions under the head house property for FY 2026-27 (tax year 2026-27)
ItemSelf-occupied, section 21(6)Let out or deemed let out
Gross annual valueNilHigher of expected rent and actual rent
Municipal taxes borne and paid by the ownerNot deductible, the annual value is already nilDeductible in the year of payment
Standard deduction under section 22(1)(a)Nil, because the net annual value is nil30% of the net annual value
Interest on borrowed capital, old regime₹2,00,000, or ₹30,000 where the conditions are not metFull interest, no ceiling
Interest on borrowed capital, new regimeNot allowed at allFull interest, no ceiling
Loss set off against other headsUp to ₹2,00,000, and nil under the new regimeUp to ₹2,00,000, and nil under the new regime

Worked example: let-out flat with a home loan, FY 2026-27

Annual rent received
₹4,80,000
Municipal taxes paid during the year
₹30,000
Interest on the home loan for the year
₹5,40,000
Pre-construction interest still to be claimed
₹2,50,000
Regime
Old regime
  • Gross annual value = ₹4,80,000
  • Less municipal taxes actually paid of ₹30,000, so net annual value = ₹4,50,000
  • Standard deduction at 30% of ₹4,50,000 = ₹1,35,000
  • Pre-construction interest of ₹2,50,000 in five instalments = ₹50,000 for this year
  • Interest allowed = ₹5,40,000 + ₹50,000 = ₹5,90,000, with no ceiling for a let-out property
  • ₹4,50,000 − ₹1,35,000 − ₹5,90,000 = a loss of ₹2,75,000
  • Set-off against other heads is capped at ₹2,00,000, so ₹75,000 is carried forward for eight tax years

Loss from house property = ₹2,75,000, of which ₹2,00,000 is set off this year and ₹75,000 is carried forward

Frequently asked questions

It is a flat allowance of 30 percent of the net annual value, given under section 22(1)(a) of the Income-tax Act, 2025 (section 24(a) of the 1961 Act). It stands in place of every claim for repairs, insurance, collection charges, electricity, water and security, so you cannot deduct those separately. The amount is the same whether you spent nothing on the property or far more than 30 percent. Because it is computed on the net annual value, a higher municipal tax payment reduces it.
Up to ₹2,00,000 a year, provided the money was borrowed to buy or build the house, construction was completed within five years from the end of the tax year in which it was borrowed, and you hold a certificate from the lender. If any of those conditions fails, or the loan was taken to repair, renew or reconstruct, the limit drops to ₹30,000. The ₹2,00,000 is an overall ceiling across both houses you may claim as self-occupied, not a limit per house.
Only on a let-out property. Section 202 of the Income-tax Act, 2025, which replaced section 115BAC, specifically withdraws the interest deduction for a house whose annual value is taken as nil, so a self-occupied house gets nothing under the default regime. Interest on a let-out or deemed let-out property is still deductible in full, and the 30 percent standard deduction survives in both regimes. The catch is that the resulting loss cannot be set against any other head.
₹2,00,000 in a year, under section 109(1)(b) of the Income-tax Act, 2025 (section 71(3A) of the 1961 Act). Anything beyond that is not lost: section 110 (section 71B) carries it forward for up to eight tax years, but from then on it can only be set against income from house property, not against salary or business income. Under the new regime there is no inter-head set-off of a house property loss at all.
Interest for the period before the property was acquired or constructed is not deductible in the years it accrues. It is accumulated and then allowed in five equal annual instalments, starting with the tax year in which the property is acquired or the construction is completed. Each instalment is claimed alongside the interest for the current year. The period runs from the date of borrowing to 31 March preceding the year of completion, or the date the loan is repaid if that comes first.
Yes. Section 21(6) and (7) of the Income-tax Act, 2025 allow the annual value of up to two houses to be taken as nil, and from AY 2026-27 the conditions were relaxed so you no longer have to show that you could not occupy a house because of your work. You simply nominate the two. Neither house may be let at any time during the year and you must not derive any other benefit from it, and any third house is taxed as deemed let out.
No. Section 21(3) allows the deduction only for taxes actually paid by the owner during the tax year, whichever year they were levied for. A bill raised but unpaid at the year end gives no deduction, while arrears cleared this year are deductible now even if they relate to earlier years. Taxes borne by the tenant are never deductible in the owner's hands, and the deduction is available only against a property with an annual value, not a self-occupied one.

Sources

Rates and rules on this page come from the following. This is a working aid, not professional advice: confirm anything material with your Chartered Accountant before you act on it.

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