Published 27 Sep 2026 · Last reviewed 27 Sep 2026 · 1 min read
In short: Rental income computation can involve annual value, municipal taxes, prescribed deduction and eligible interest.
Rental-income tax basics
Rent from a building is commonly computed under income from house property, subject to ownership, property use and exceptions. Start with gross annual value, adjust eligible municipal taxes, apply the statutory deduction and consider eligible borrowed-capital interest under current law.
Records to keep
- Registered or written tenancy agreement and tenant KYC.
- Banked rent receipts and security-deposit records.
- Municipal-tax receipts.
- Loan interest certificate.
- Co-ownership shares and expense evidence.
Other compliance
Tenant-side TDS may apply depending on payer and rent. GST can arise in specified commercial or registration situations. Security deposits are not automatically rent, but adjustments and forfeiture need correct treatment.
Source
Income Tax Department. Tax reviewer: [Name and credentials].
Frequently asked questions
Is rental income taxed on gross rent?
House-property computation may allow prescribed adjustments and deductions, subject to conditions.
Can municipal tax be deducted?
Eligible taxes actually paid may be considered under applicable rules.
Does the tenant deduct TDS?
It depends on tenant category, rent and current threshold/provision.
Tax on Rental Income in India: House Property Guide
Last reviewed: September 2026 · We broker land in Delhi NCR, so treat anything about specific plots as a commercial interest. Verify title, approvals and measurement independently. See Disclaimer.
