Income tax on rental income

Vivek S (IT Program Manager) (27 Points)

31 January 2012  

Hi Friends,

I have a query regarding rental income. I undestand that rental income less than 1.8L are not taxable but anything above this will be taxed as a whole at 10%. Also there is a standard deduction can be applied to this income which is 30%.

Q1. Is this understanding re rental income and it's corresponding tax bracket correct, if not then please clarify?

Q2. Does one need to show proofs to get the 30% standard deduction on rental income?

Q3. If the above understanding is correct then if we assume the montly rental income as 25K then will the below tax calculation valid?

Total annual rental income = 25k x 12 = 3.0 lakhs. With 30% standard deduction on this [30%*3.0Lakhs = 90k]

Net taxable rental income = 3.0 L - 90k = 2.1 lakhs. So the tax payable is 10% * 2.1 lakhs = 21K  i.e. 1750 per month.

Really appreciated if you can confirm the above understanding. Thanks in advance !


Vivek S.