EaseValueAlmost everything people believe about the tax on a house they own is a half-truth. That a house you live in is tax-free: broadly right, but only for a limited number of them. That a house lying empty produces no income: wrong, and expensively so — beyond that number, an empty house is deemed to be let out and taxed on rent nobody ever paid you. That your home-loan interest is deductible: true under one regime and simply not true under the other. That a loss on a rented property can be set against your salary: true only up to a cap, after which it is carried forward under a restriction that makes it very hard to use. This calculator computes your income under the house-property head properly, for up to three properties at once, showing each one under all three treatments — self-occupied under Section 21, actually let out, and deemed let out — so the arithmetic is visible rather than asserted. It then does the thing no ordinary calculator does: it works out which houses you should elect as self-occupied. That election is yours, it is made afresh every year, and it is worth real money. On a three-property portfolio with one mortgaged house, choosing the wrong two costs ₹1,76,904 in a single year — not because anything changed about the properties, but because of which label went on which house. The counter-intuitive answer is usually that the heavily mortgaged house belongs in the deemed-let-out column, where interest is deductible in full, while the house with the highest market rent belongs in the self-occupied column, where its annual value drops to nil. Most people do the opposite out of instinct, and pay for it.
How it’s calculated
- Pick your regime first, because it changes the answer more than anything else on the page. Under the old regime, interest on a self-occupied house is deductible up to ₹2,00,000 and a house-property loss can be set off against your salary up to ₹2,00,000. Under the new regime, neither is available. The two cap boxes are set for you when you switch and both remain editable.
- Say how many properties you own, and enter every one of them — including any lying empty, any occupied by a parent or a child, and any in a home town you visit twice a year. A property you never let out is not outside the tax net, and leaving it off the page will not leave it off your return.
- Check how many may be treated as self-occupied. Two is the number currently in force. It is an input rather than a hard-coded figure because it has been changed before — it was one until relatively recently — and because the entire point of this tool is to show you what the house beyond that number costs.
- Set the interest cap on a self-occupied property. The important and widely missed feature of that cap is that it is an aggregate across all your self-occupied houses, not a limit per house. Two houses with ₹1,50,000 of interest each do not give you ₹3,00,000 of deduction; they give you the cap, once.
- Set the cap on set-off of a house-property loss against other income. Under the old regime this is ₹2,00,000 a year, and under the new regime the set-off against other heads is not available at all, so the box is set to nil. Anything above the cap is carried forward, under a restriction covered below.
- Enter your other taxable income — salary after the standard deduction under Section 19, business income, interest, capital gains. House-property income is ordinary income and stacks on top of it, so the rate it actually bears depends on this figure.
- For each property, first say whether it is actually let out or not. Anything not let out is eligible to be elected as self-occupied; anything let out is taxed as let out and cannot be elected. This is a question of fact, not preference.
- Enter the annual rent received where the property is let, and the annual market rent for every property including the one you live in. The market-rent figure is what the property could reasonably be expected to fetch, and it is not decoration: it becomes the taxable value the moment that house is not one of the ones you elect as self-occupied. Inflating it out of caution costs you money directly.
- Enter the municipal taxes you actually paid during the year. Accrued and unpaid does not count. This is one of the few places where paying a pending demand before 31 March converts a liability into a deduction, and it is worth checking every March.
- Enter the loan interest for the year and, separately, what you actually spend on repairs, maintenance, insurance and society charges. The second figure does not enter the computation — it cannot, and the tool explains why — but it is what lets the page tell you whether the flat 30% allowance is running for or against you.
- Set your ownership share for each property. Co-owners with definite and ascertainable shares are each assessed on their own share under Section 24, and the caps apply to each co-owner separately, which is why a jointly owned mortgaged property is frequently more efficient than a solely owned one.
- Read the best election row and then the worst one beneath it. The difference between them is what the labelling decision is worth to you this year, and nothing else about your affairs has to change to capture it. If the two rows are the same, nothing turns on the choice and you can stop thinking about it.
- Read the per-property table. Every property is shown under all three treatments, so you can see for yourself why the recommended election came out the way it did. Where the aggregate self-occupied interest cap is biting, a line beneath the table shows the total interest against the amount actually deductible.
- Read the set-off and carry-forward rows together. A loss that cannot be set off this year is not lost, but the carry-forward is restricted to house-property income in later years — so it is worth much less than the number suggests, and it is extinguished altogether if the return is filed late.
- Read the three coloured boxes last. The first prices the deemed-let-out charge, or tells you what would trigger it. The second explains your set-off and carry-forward position. The third settles the question everybody asks about the 30% deduction and actual expenses, which almost every guide states loosely.
The three treatments, and why the label decides the tax
Income from a property you own is charged under Section 20 of the Income-tax Act, 2025 on the annual value of the property. That phrase is the key to everything that follows, because the charge is not on rent received. It is on the value of the property's capacity to be let, and a property has that capacity whether or not anybody is actually paying for it.
A self-occupied property has an annual value of nil under Section 21. No income arises from it at all. Against that nil value, the only deduction available is interest, and it is capped — ₹2,00,000 under the old regime, and nothing at all under the new regime. So a self-occupied house can produce a nil result or, on the old regime with a loan, a loss of at most the cap.
A let-out property is taxed on its annual value, which is the higher of the rent you actually receive and the rent it could reasonably fetch. From that you deduct the municipal taxes you actually paid during the year, giving the net annual value. From that you take two deductions under Section 22: a flat 30% of the annual value, and interest on borrowed capital, in full, with no cap of any kind. That last point is the single most consequential difference between the two treatments, and it is where the planning lives.
A deemed let-out property is computed exactly like a let-out one, except the annual value is the rent it could reasonably fetch, because no rent is actually being received. It arises where you own more properties that are not let out than the number that may be treated as self-occupied — currently two. The house beyond that number is taxed on notional rent. Vacancy is not a defence, family occupation is not a defence, and the fact that you would never dream of letting it is not a defence.
Set those three side by side and the planning point becomes obvious, though it is almost universally missed. A house with a large loan does badly as self-occupied, because its interest deduction is capped or nil, and does well as deemed let out, because the interest is then deductible in full against a notional rent that is often much smaller. A house with a high market rent and no loan does the opposite. So the right election is frequently the counter-intuitive one: call the mortgaged house deemed let out and the unmortgaged one self-occupied, even where you physically live in the mortgaged one. The Act does not require the house you elect to be the house you sleep in — the election is a legal designation, not a statement of where you keep your things.
On a worked three-property case — one house with ₹9,00,000 of annual interest and a ₹3,60,000 market rent, one with an ₹8,40,000 market rent and no loan, one with ₹4,80,000 and no loan, against other income of ₹25,00,000 on the old regime — the best election produces a tax bill of ₹5,22,600 and the worst produces ₹6,99,504. The difference of ₹1,76,904 is created by nothing except which two houses were designated. It is made afresh every year, so a bad choice is not permanent, but a bad choice repeated for a decade is a very large sum.
The deemed let-out charge: tax on rent nobody paid you
This is the provision that catches ordinary people who have never thought of themselves as property investors, and the fact pattern is depressingly consistent. Someone inherits the family house in a smaller town. Someone buys a flat for a child who has not moved in yet. Someone keeps the apartment they lived in before a job transfer, because the market is soft and they would rather not sell. In each case there is a house that produces no income, costs money to maintain, and generates a real tax bill.
The number that may be treated as self-occupied is currently two. Beyond that, a house you neither let out nor can elect is deemed to be let out, and is taxed on the rent it could reasonably be expected to fetch. On a straightforward case — three houses, no loans, a ₹6,00,000 market rent on the third and ₹25,000 of municipal taxes, against ₹20,00,000 of other income on the new regime — the third house adds ₹4,02,500 of income and costs ₹1,04,780 of tax in the year. That is roughly ₹8,700 a month, payable in real rupees, on a house sitting empty.
Two things reduce the charge, and both are commonly missed by people who assume there is nothing to be done. The first is the market-rent figure itself. The standard is what the property could reasonably be expected to fetch — a question of fact, supportable by local comparables, municipal valuations and the rents that similar units in the same building actually achieve. Taxpayers routinely overstate it out of caution and pay tax on the excess. It should be a considered, documented figure, not a guess rounded upward.
The second is that a deemed let-out property attracts the full let-out deduction set: municipal taxes paid, the 30% flat allowance, and — critically — interest in full with no cap. A heavily mortgaged property that is deemed let out can easily produce a loss rather than income, and on the worked case above, deeming the mortgaged house rather than an unmortgaged one turned what looked like a penalty into the cheaper answer. The calculator on this page says so explicitly when it happens, rather than assuming the limit is always bad news.
One further point of practical importance: the deemed charge is driven by how many properties are not let out, so genuinely letting one of them changes the position entirely — the property is then taxed on actual rent, which is money you are receiving, rather than on notional rent, which is not. For a surplus property in a lettable location, the tax comparison rarely favours leaving it empty.
Finally, note what the number of self-occupied properties does not depend on. It is not affected by where you work, whether you can plausibly occupy both houses, or whether they are in the same city. It is a straightforward numerical limit, exposed as an input on this page precisely because it has been changed by amendment before and may be again.
The 30% standard deduction, and the question everyone gets wrong
Ask most people whether they can claim their actual repair and maintenance costs on a let-out property and you will get an uncertain answer about choosing whichever is higher. That is not how it works, and the misunderstanding costs money in both directions.
Under Section 22 you are allowed a flat 30% of the annual value, and that is the whole of it. It is not an election. Your actual expenditure on repairs, painting, maintenance, insurance, society charges and the rest is not separately deductible at all, no matter how well documented and no matter how far it exceeds 30%. Equally, you get the full 30% in a year in which you spent nothing whatsoever on the property.
The break-even is therefore simply 30% of the annual value, and the useful question is which side of it you are on. On an annual value of ₹9,50,000 the allowance is ₹2,85,000; a landlord spending ₹1,00,000 a year on a low-maintenance flat is ₹1,85,000 ahead of what a real-expenditure deduction would have given, while a landlord spending ₹6,00,000 on an ageing building with heavy society charges is ₹3,15,000 behind, and there is no relief for the difference. This calculator asks for your actual spending purely so it can tell you which of those two you are, because the answer changes how you think about the asset — a high-maintenance property is materially worse after tax than its rent alone suggests, and a newly built or well-tenanted one is materially better.
Two related points are worth knowing. The 30% is computed on the annual value after municipal taxes, so paying a pending municipal demand before 31 March both reduces the annual value directly and is one of the very few genuinely deductible property outgoings. And capital improvements are not deductible here at all — a new kitchen or an added room is added to your cost of acquisition and reduces your capital gain whenever you eventually sell, which means the bills need keeping for decades rather than years. Owners throw away improvement receipts constantly and pay for it at the point of sale, sometimes thirty years later.
A third deduction is genuinely under-claimed and this calculator does not model it: pre-construction interest. Interest paid for the period before the property was ready for occupation is allowed in five equal annual instalments beginning with the year of completion, on top of the current year's interest. On an under-construction purchase with a long delay, that is a substantial deduction, and a great many owners never claim it because nobody told them it existed. If you bought off-plan, work out the interest for the pre-completion period and check whether the instalments have been claimed.
The set-off cap, and why the carry-forward is worth less than it looks
A house-property loss is a common and entirely legitimate outcome. Interest on a let-out property is deductible in full, so a recently purchased rental where the loan is large and the rent is modest will regularly produce a loss running to several lakh. What happens to that loss is where the disappointment sets in.
Under the old regime, a house-property loss may be set off against income under other heads — your salary, most obviously — but only up to ₹2,00,000 in a year. Anything beyond that is carried forward. Under the new regime, the set-off against other heads is not available at all, which is one of the least advertised differences between the regimes and matters enormously to anyone carrying a large loan on a rented property.
On a worked case — a self-occupied house with ₹1,50,000 of interest and a let-out flat producing ₹6,00,000 of rent against ₹9,00,000 of interest and ₹30,000 of municipal taxes — the head produces a loss of ₹6,51,000. Of that, ₹2,00,000 is set off this year and ₹4,51,000 is carried forward. The taxpayer has economically borne the whole ₹6,51,000 and has been given relief for less than a third of it.
The carried-forward balance survives for up to eight years, and here is the restriction that makes it far less valuable than the number suggests: a carried-forward house-property loss can only be set off against house-property income in those later years. It cannot be set against salary or business income. So it is genuinely useful only if you expect this property, or another one, to turn profitable within the window — which for a heavily mortgaged property usually means several years away, by which time some of the eight will have gone. At a 30% marginal rate a ₹4,51,000 carry-forward is nominally worth ₹1,35,300, but only if the head turns positive in time, and it is worth nothing at all if it does not.
One condition destroys it outright and is entirely within your control: the loss must be returned in a return filed by the due date. File late and the carry-forward is extinguished. That turns a timing problem into a permanent one, and it happens to people whose only reason for filing late was that they expected a refund and were in no hurry.
There is a structural answer worth raising with an advisor in the right circumstances: co-ownership. Under Section 24, co-owners with definite and ascertainable shares are each assessed on their own share, and the set-off cap applies to each of them separately. Two co-owners with a ₹4,00,000 combined loss may each set off their ₹2,00,000 share, where a sole owner would set off ₹2,00,000 and carry forward the rest. That has to be established properly at the time of purchase, with genuine contribution and correct documentation, and it is not something to arrange retrospectively.
The regime choice, seen from the house-property head
The old-versus-new comparison is normally run on slab rates and deductions, and the house-property head is often reduced to a footnote. For a property owner with a loan it is frequently the deciding factor, and it works in opposite directions depending on what kind of owner you are.
For an owner-occupier with a home loan, the old regime allows interest up to ₹2,00,000 against a nil annual value, producing a loss of up to ₹2,00,000 that can be set off against salary. At a 30% marginal rate that is worth ₹62,400 a year including cess. The new regime allows nothing — no interest deduction against a self-occupied house at all. For someone whose case for the old regime rests on that deduction plus a handful of others, this is the number the whole comparison turns on, and it is worth running properly rather than assuming the new regime wins because the rates are lower.
For a landlord, the picture is different and less bleak. Interest on a let-out property is deductible in full under both regimes — the cap is a feature of the self-occupied treatment, not a general limit — and the 30% allowance is available under both. What the new regime removes is the ability to set a resulting loss against other heads. So a landlord whose rental portfolio is profitable is largely indifferent between the regimes on this head, while one whose portfolio runs at a loss loses the annual set-off and must rely on the carry-forward.
That produces a rule of thumb worth stating plainly: the new regime penalises the owner-occupier with a loan much more than it penalises the landlord. The person most likely to be caught out is the salaried buyer of a first home who moved to the new regime for the lower rates without pricing what the interest deduction was worth to them.
One caution about switching. The ability to move between regimes is not unrestricted for everyone — the position differs between someone with only salary income and someone with business income — so treat the regime as a decision to be taken with advice rather than toggled annually on instinct. The calculator on this page will compute your position under either, which is enough to see the size of the difference before you take that advice.
Note also that the caps and thresholds on this page are inputs, not assertions. The number of properties treatable as self-occupied, the self-occupied interest cap and the loss set-off cap are all editable, with regime-appropriate defaults, because each has been amended before. If any of them changes, the tool remains usable, and you are never relying on a hard-coded figure that quietly went stale.
What this calculator does not model, and the section numbers behind it
A house-property computation has more corners than a calculator can honestly cover, and it is better to name the ones left out than to produce a confident figure that silently ignores them.
Not modelled: unrealised rent, where a tenant has defaulted and the conditions for excluding that rent from the annual value are satisfied; the vacancy allowance, where a property that is genuinely let is empty for part of the year and the annual value is reduced accordingly; arrears of rent and recovered unrealised rent received in a later year, which are taxable in that year with their own deduction; pre-construction interest in five instalments, discussed above; property held as stock in trade by a builder, which has its own treatment and its own time limit before the deemed charge begins; a property that is partly self-occupied and partly let, which has to be apportioned; and any property outside India, which raises residence and treaty questions this page does not touch.
Also not modelled: the position of a non-resident landlord, whose computation under this head is identical but whose practical problem is quite different — tax is withheld on the gross rent at a rate far above the eventual liability, locking up large sums until a return is filed. That is a distinct calculation and belongs in a dedicated tool.
On the arithmetic that is modelled, one honest caveat. Where the aggregate self-occupied interest cap is binding across more than one house, the per-property rows in the table apportion the capped deduction pro rata so that they add up to the head total. The apportionment is presentational — the cap is a single aggregate figure and the Act does not allocate it between houses — and the row beneath the table always shows the total interest against the amount actually deductible, so the real position is never hidden behind the split.
On section numbering, five provisions are cited on this page with confidence because each has been verified against the Income-tax Act, 2025: Section 20 for the charge on income from house property, Section 21 for the determination of annual value including the nil value of a self-occupied house, Section 22 for the 30% standard deduction and the deduction for interest on borrowed capital, and Section 24 for co-owners. Also cited are the standard deduction from salary under Section 19 and the rebate under Section 156. Where a rule could not be tied to a verified section number it is described in words rather than given one — a discipline that matters more on a firm's own public tool than anywhere else.
Treat the output as a well-informed basis for a conversation. The election above is the part worth acting on quickly: it is made in the return, it is remade every year, it costs nothing to get right, and on a multi-property portfolio it is routinely worth more than every other line on this page combined.
Frequently asked questions
How many houses can I treat as self-occupied?
Two, under the position currently in force. Beyond that number, any property you own and have not let out is deemed to be let out and taxed on the rent it could reasonably fetch — even if it is empty all year, even if a parent lives in it, and even if you would never consider letting it. The calculator leaves the number as an editable input because it has been amended before; it was one until relatively recently. It also prices the difference for you: on a straightforward three-property case with no loans, the third house adds ₹4,02,500 of income and costs ₹1,04,780 of tax in a single year.
Which house should I call self-occupied?
Usually not the one you sleep in. The election is a legal designation, and the arithmetic generally favours putting the heavily mortgaged house in the deemed-let-out column — where interest is deductible in full, with no cap — and the house with the highest market rent and no loan in the self-occupied column, where its annual value drops to nil. On a worked three-property case the best election produced a tax bill of ₹5,22,600 and the worst ₹6,99,504: a difference of ₹1,76,904 created by nothing but the labelling. The election is made afresh every year, so last year's choice does not bind you.
My flat is empty. Do I really pay tax on rent I never received?
Beyond the permitted number of self-occupied properties, yes. The charge under Section 20 is on the annual value of the property — its capacity to be let — not on rent received, so vacancy is not a defence. Two things reduce the bill and both are commonly missed. The market-rent figure is a question of fact supportable by local comparables, and taxpayers routinely overstate it out of caution and pay tax on the excess. And a deemed let-out property attracts the full deduction set, including uncapped interest — so a mortgaged property that is deemed let out often produces a loss rather than income.
Can I deduct my actual repair and maintenance costs instead of the 30%?
No, and this is the point almost every guide states loosely. Under Section 22 you get a flat 30% of the annual value and that is the whole allowance — it is not an election. Your actual repairs, painting, maintenance, insurance and society charges are not separately deductible at all, however well documented. The consequence runs both ways: spend nothing and you still get the full 30%; spend well above it and the excess gets you nothing. The break-even is simply 30% of your annual value, and the calculator tells you which side of it you are on. Capital improvements are a separate matter — they are not deductible here but they raise your cost of acquisition and reduce your capital gain on an eventual sale, so keep those bills for decades.
How much of a house-property loss can I set against my salary?
Under the old regime, up to ₹2,00,000 a year. Under the new regime, none at all — the set-off against other heads is not available, which is one of the least advertised differences between the regimes. Anything not set off is carried forward for up to eight years, but with a restriction that makes it much less valuable than the figure suggests: a carried-forward house-property loss can only be set off against house-property income in those later years, never against salary. And it is extinguished entirely if the return for the loss year is filed after the due date.
Does the ₹2,00,000 interest cap apply to each self-occupied house?
No — it is an aggregate across all of them. Two self-occupied houses with ₹1,50,000 of interest each give you ₹2,00,000 of deduction in total, not ₹3,00,000. This is one of the most commonly assumed-away rules in the whole head, and the calculator shows it explicitly: where the cap is binding, a line beneath the property table sets out your total self-occupied interest against the amount actually deductible. Interest above the cap is simply lost — it is not carried forward. Note also that the cap belongs to the self-occupied treatment only; on a let-out or deemed-let-out property, interest is deductible in full under both regimes.
We own the flat jointly. How does that change things?
Under Section 24, co-owners with definite and ascertainable shares are each assessed on their own share of the property's income, and the caps apply to each co-owner separately. That can be materially better than sole ownership: two co-owners with a ₹4,00,000 combined loss may each set off their ₹2,00,000 share against other income, where a sole owner would set off ₹2,00,000 and carry the rest forward under the restricted carry-forward rules. The same logic applies to the self-occupied interest cap. It has to be established properly at the time of purchase, with genuine contribution and correct documentation — it is not something to arrange after the fact.
Is the new regime worse for me if I have a home loan?
For an owner-occupier, materially so. The old regime allows interest up to ₹2,00,000 against a self-occupied house, producing a loss that can be set against salary — worth ₹62,400 a year at a 30% marginal rate including cess. The new regime allows nothing against a self-occupied house. For a landlord the picture is much less bleak: interest on a let-out property is deductible in full under both regimes and the 30% allowance is available under both, so a profitable rental portfolio is largely indifferent. The rule of thumb is that the new regime penalises the owner-occupier with a loan far more than it penalises the landlord. Run both on this page before deciding, and take advice before switching, since the ability to move between regimes is not unrestricted for everyone.
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