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Rule 37BB of the Income Tax Act

Steps to calculate income from house property

Gross Annual Value of the property

The gross annual value of a self-occupied house is zero. It is the rent collected for a house on rent.

Less: Property Tax

Property tax, when paid, is allowed as a deduction.

Net Annual Value

Net Annual Value = Gross Annual Value - Property Tax

Less: 30% standard deduction on NAV

Two deductions are allowed under Section 24 of the Income Tax Act - one, a standard deduction of 30% and two, interest on home loan.

Less: Interest on home loan

No other expenses such as painting and repairs can be claimed as tax relief beyond the 30% cap under this section.

Income from house property

The resulting value is your income from house property. This is taxed at the slab rate applicable to you.

Loss from house property.

Since the gross annual value of a self-occupied house is zero, claiming the deduction on home loan interest will result in a loss from house property. This loss can be adjusted against income from other heads.

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