In India, tax is to be paid under the five heads viz. Income from salary, Income from house property, professional & business income, capital gains & other sources. If you want to save tax in respect of your rental income in India then fortunately you have landed on the right page. There are various ways you can plan your income tax in respect of rental income.
Income from house property in India is taxed under section 24 of Income tax Act. In order to do some tax planning for saving tax on rental income one can make use of deductions(available), exemptions & rebates. Below are the ways one can save tax for house property & rental income.
How To Save Tax on Rental Income in India
- First understand the steps to calculate your income generated from house property
- There is standard deduction of 30% of rent income available and municipal taxes paid by you are also deductible.
- Claim deduction for interest on borrowed loan
- You can invest in eligible schemes such as PPF(Public Provident Fund), Life Insurance, Equity oriented mutual funds etc. to claim 80C benefit up to Rs. 150000
- When you & your spouse take a loan jointly and contribute towards acquiring the house property financially, the burden of tax on rental income can be reduced considerably by sharing the rental income based on the co-ownership.
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Saving tax on rent is process of benefiting the available exemptions, deductions and rules made under the income tax Act. So, this was how you can easily Save tax on rental income in India. One can also hire the income tax consultant for purpose of getting best tax concessions and saving for income on rental property in India.