Residential status does not change taxability rules for rental income

News, Taxation

Rental income from house property situated in India is liable to income-tax in India. The method of computing taxable value of rental income is as follows: Gross annual value less municipal taxes gives the net annual value (NAV). Reduce standard deduction of 30% of NAV and interest on housing loan from this to get taxable rental income.

Gross annual value is higher of the following: (a) Amount at which the property might reasonably be expected to be let out; or (b) Actual rent received or receivable. In other words, gross annual value compares the actual rent received or receivable with the expected rent the property would fetch.

Taxability of rental income would remain the same, irrespective of your residential status.

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