Revised Tax Bill 2025: Key Changes to House Property Income Rules
Thank you for reading this post, don't forget to subscribe!The revised Income Tax Bill, 2025, has introduced important clarifications for “Income from House Property” that will affect homeowners, particularly those with rental properties. Clause 22 of the new bill resolves two long-standing ambiguities, ensuring the new tax law aligns with existing practices.
1. Standard Deduction Clarification
The new bill clarifies that the 30% standard deduction will be applied to the net annual value of a property. This net value is calculated after deducting municipal taxes from the gross annual value. The initial draft of the bill had been unclear on this point, causing concern that the deduction might be applied to the gross value, which would have resulted in a higher tax burden. The Select Committee recommended this change to maintain fairness and consistency with current tax laws.
2. Pre-Construction Interest Deduction for Rental Properties
The revised bill extends the deduction for pre-construction interest on home loans to both self-occupied and let-out properties. The earlier draft had proposed limiting this benefit to only self-occupied properties. This change restores a benefit that homeowners currently enjoy, ensuring that individuals who rent out their properties can still claim this deduction in five equal annual installments.
What This Means for Homeowners
These clarifications are a win for homeowners. If you have a home loan for a property, whether you live in it or rent it out, you can continue to claim deductions for:
- Municipal taxes paid
- A 30% standard deduction on the net annual value
- Interest on your home loan, including pre-construction interest spread over five years.
These changes provide clarity and prevent potential disputes, making the computation of “Income from House Property” more straightforward for taxpayers.
Thank you for your entire hard work on this web site. My aunt really loves getting into investigations and it’s really easy to see why. We all learn all of the lively ways you present precious secrets via your web site and even boost response from other people on the concept and our simple princess is undoubtedly being taught a lot of things. Take advantage of the rest of the new year. You have been carrying out a stunning job.
Hey just wanted to give you a quick heads up. The words in your content seem to be running off the screen in Internet explorer. I’m not sure if this is a formatting issue or something to do with browser compatibility but I thought I’d post to let you know. The design and style look great though! Hope you get the issue solved soon. Cheers