How to Calculate Income from Partially Let-Out Property under Income Tax Act

1. Reporting rental income: Rental income from both flats should be reported under the head "Income from House property" in the income tax return.
2. The actual rent received is typically reported. However, if a property is vacant for part of the year, the treatment an depend on whether it was let out for the full year or not. If Flat A was let out for part of the year and vacant for the rest, the actual rent received should be reported. Thr option of treating it as 'let out for the full year' espite being vacant for 6 months may not be applicable as per standard tax practices, but specific tax laws and rules should be consulted.
3. Notional rent is applicable when a property is deemed to be let out, even if it's not actually rented out. If Flat A was under renovation and listed for sale with no intention to rent, the applicablity of notional rent needs to be checked against the specific tax laws..Generally , notional rent is considered when a property is deemed to be let out or self-occupied. If it was not intended for rental during the renovation period, the notional rent might not be applicable.
4. Interest deduction: Interest deductio on home loans is allowed under Section 24(b) of the Income tax act for properties that are let out or deemed to be let out. For self-occupied properties, the deduction is limited to two lakhs per annum under Section 24(b), provided the property is self-occupied and not let out. If only one property can be treated as self-occupied, , the interest deduction for that property will be limited to two lakhs. For other properties that are let out, the entire interest paid can be claimed as a deduction. 

Thank you, Mr. Rama Chary Rachakonda, for your valuable guidance. Your support is truly appreciated.

Please find below the rental income computation:

Flat A - Rental Income 10000 x 6 = 60000
Less - Municipal Taxes
Less - Standard Decutions u/s 24(a)

Flat B - Rental Income 10000 x 6 = 60000
Less - Municipal Taxes
Less - Standard Decutions u/s 24(a)
Less - Intersest on Borrowings u/s 24(b)

Flat C - Self Occupied
Less - Interest deductions limit u/s 24(b)

With sincere thanks and regards.