Question 1

What is the difference between self-occupied and let-out property for tax purposes?

Accepted Answer

Self-occupied: Annual Value is Nil (0), so no rental income is taxed, but you can claim home loan interest deduction up to ₹2 lakh (old regime only). Let-out: Actual rent received is taxable, you get 30% standard deduction on Net Annual Value, and full interest deduction without any limit. Both have different tax implications.

Question 2

Can I have more than one self-occupied property?

Accepted Answer

From FY 2019-20, you can claim up to 2 properties as self-occupied with Nil annual value. If you own 3+ properties, the 3rd onwards is treated as deemed let-out - you must pay tax on notional rent even if you're not actually renting it out. This is based on expected market rent.

Question 3

How is loss from house property treated for tax purposes?

Accepted Answer

Loss from house property (interest exceeding rental income) can be set off against other income like salary, but limited to ₹2 lakh per year. Excess loss can be carried forward for 8 years and set off only against future house property income. This limit applies to both self-occupied and let-out properties combined.

Question 4

What is the 30% standard deduction for let-out property?

Accepted Answer

For let-out properties, you get a flat 30% deduction on Net Annual Value (rent minus municipal taxes) without needing to show actual expenses. This covers repairs, maintenance, collection charges, etc. You cannot claim additional deductions for these expenses separately - only interest is deductible over and above this.

Question 5

Is home loan interest deduction available under new tax regime?

Accepted Answer

For self-occupied property: No, interest deduction is NOT available under new regime. For let-out property: Yes, both 30% standard deduction and full interest deduction are available under new regime. This makes let-out property more tax-efficient under new regime compared to self-occupied.

House Property Income Tax

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