New Income Tax Bill 2025: The new income tax bill will give big tax relief to the landlords. This will also boost the real estate sector and people will come forward to rent out their property without fear. This step of the government is considered an important initiative towards making the tax system easy and transparent…
New Income Tax Bill 2025: The central government has recently introduced a new income tax bill, after its enactment, landlords across the country are going to get a big relief. Now tax on rental income will be levied directly on the net annual value, that is, after deducting the municipal tax from the total rent, tax will have to be paid on the amount left.
Earlier, when this bill was introduced in Parliament in February 2025 , there was a lot of confusion about it. Many people were thinking that the government would impose tax on gross rent i.e. the total rent of the entire year on rental income. If this had happened, the tax liability of the landlords would have increased significantly. But now the government has made it clear that tax will be levied only on net rent.
What is net annual value?
Net annual value means the total rent received in a year, from which the tax paid to the municipal corporation is deducted. For example, if the annual rent of a house is ₹ 5 lakh and ₹ 50,000 municipal tax has been paid on it, then the net rent will be considered as ₹ 4.5 lakh. Tax will be levied on this ₹ 4.5 lakh.
You will get 30% standard deduction
The government has also clarified that 30% standard deduction will be available on net rent. This means that 30% of the net rent amount will be deducted directly, which will further reduce the tax amount. This deduction is given keeping in mind the repair, maintenance and other expenses of the house.
There will also be a discount on interest on home loan
Another good thing in the new bill is that if the house owner has taken a home loan on that property, then its pre-construction interest i.e. interest before construction will also be exempted from tax. Earlier this exemption was available only on the property in which one lived, but now it will also be applicable on the property given on rent. Along with this, if a property has more than one owner (co-owner), then now they will also get separate tax exemptions. Earlier in such a situation, the calculation of tax was a bit complicated, but now the rules have become clear.
