What are the deductions available for Income from House Property?

Here are the deductions that you can claim on the Income from House Property: -

1. Standard Deduction

The taxpayer must have spent some amount to maintain the house property such as repairs, maintenance, depreciation, etc, the Income-tax Act provides a standard deduction of 30% from Net Annual Value of house property.

2.  Interest on housing loan-

If a taxpayer takes a housing loan to purchase or to construct a house property, then he/she is supposed to pay EMI to the bank or any other lender. This EMI is basically divided into 2 parts and they are Interest & principal.

Deduction of interest part can be claimed on the income from house property, whereas deduction of the principal amount in case of residential house property can be claimed under section 80C.

Deductions on housing loan interest depend upon the type of house property. The amount available for deduction in each type are mentioned below: -

1. a) Self-occupied house property:

If the housing loan is taken for the purchase or construction of the property, then the maximum interest of Rs. 2,00,000 can be claimed by the taxpayer during a financial year.

Moreover, if the loan is taken for the renovation or repair of the property, the maximum interest of Rs. 30,000 can be claimed by a taxpayer during a financial year.

1. b) Let out or deemed to be let out property:

There is no limit for claiming deduction for interest on housing loan for let out property.

Pre-construction interest: - The interest paid for housing loan when the house property is under construction is known as Pre-construction Interest. The deduction on pre-construction interest is allowed in 5 equal installments starting from the year when construction completes.

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