Quick Summary
The newly passed Income Tax Bill, 2025 has addressed a wave of concerns raised earlier this year about how rental income and home loan deductions would be computed under the new tax framework. The law confirms that there will be no changes to the current taxation method for rental income or the deductions available on home loans - whether for self-occupied or let-out properties. After the Bill was first tabled in February, uncertainty grew among homeowners over whether tax on rental income woul
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FAQ :
The Bill confirms that the taxation method for rental income remains unchanged. Tax will continue to be calculated on the net annual value after deducting municipal taxes, with a 30% standard deduction applicable.
No, the new Bill ensures there are no changes to the deductions available on home loans for both self-occupied and let-out properties.
Yes, pre-construction interest deductions are available for both self-occupied and let-out properties under the new Bill.
For under-construction homes, pre-construction interest can be claimed in five equal annual instalments starting from the year of possession.
The new law will take effect from April 1, 2026, aligning with the financial year 2026-27.
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