Deductions from income from house property
[Section 22 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 22(1) of Income Tax Act 2025
22(1) The income under the head “Income from house property” shall be computed after allowing the following deductions:––
- (a) 30% of the annual value;
- (b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital.
Section 22(2) of Income Tax Act 2025
22(2) In case of property or properties referred to in section 21(6), the aggregate amount of deduction under sub-section (1)(b) shall not exceed—
- (a) two lakh rupees, subject to the following conditions:––
- (i) the property has been acquired or constructed with borrowed capital and such acquisition or construction is completed within five years from the end of tax year in which capital was borrowed;
- (ii) if capital is borrowed during any period prior to the tax year in which the property has been acquired or constructed, any interest payable for the said prior period shall be allowed as a deduction in five equal instalments for the said tax year and for each of the four immediately succeeding tax years;
- (iii) the assessee furnishes a certificate from the person to whom interest is payable on such capital; and
- (b) thirty thousand rupees in any other case.
Section 22(3) of Income Tax Act 2025
22(3) The deduction under sub-section (2)(a)(ii) shall be computed after reducing any amount already allowed as a deduction under any other provisions of this Act.
Section 22(4) of Income Tax Act 2025
22(4) The certificate referred to in sub-section (2) shall specify––
- (a) the amount of interest payable on capital borrowed; and
- (b) the interest payable on any new loan, where subsequent to the capital borrowed, the assessee has taken any such loan for repayment of whole or any part of such capital.
Section 22(5) of Income Tax Act 2025
22(5) The aggregate of the amounts of deduction under sub-section (2) in respect of properties of the nature referred to in section 21(6) shall not exceed two lakh rupees.
Section 22(6) of Income Tax Act 2025
22(6) Any interest chargeable under this Act which is payable outside India shall not be allowed as a deduction under this section, if—
- (a) tax has not been paid or deducted on such interest under Chapter XIX-B; and
- (b) in respect of such interest, there is no agent in India as per section 306.
FAQs on Section 22 of Income Tax Act 2025
1. What is “Income from house property” under the Income Tax Act, 2025?
It refers to income earned from renting out house property, computed after specific deductions as per Section 22(1).
2. What deductions are allowed from income from house property?
A standard deduction of 30% of the annual value (Section 22(1)(a)). Interest on borrowed capital for purchase, construction, repair, renewal, or reconstruction (Section 22(1)(b)).
3. Can I claim a deduction for interest paid on a home loan?
Yes, interest on borrowed capital is deductible under Section 22(1)(b).
4. Is there a maximum limit on the interest deduction for self-occupied properties?
Yes, the maximum deduction is ₹2 lakh (Section 22(2)(a)), subject to conditions.
5. What are the conditions for claiming a ₹2 lakh deduction on interest?
The property must be acquired or constructed with borrowed capital. The construction must be completed within five years from the end of the tax year in which the loan was borrowed (Section 22(2)(a)(i)). A certificate from the lender must be furnished (Section 22(2)(a)(iii)).
6. What if the above conditions are not met?
The maximum deduction is limited to ₹30,000 (Section 22(2)(b)).
7. Can I claim a deduction for interest paid before property acquisition/construction?
Yes, interest paid before completion can be claimed in five equal installments starting from the year of completion (Section 22(2)(a)(ii)).
8. Is the pre-construction interest deduction subject to any limit?
Yes, it is included in the overall ₹2 lakh limit for self-occupied properties (Section 22(5)).
9. Is a certificate mandatory for claiming an interest deduction?
Yes, the lender must provide a certificate specifying the interest amount (Section 22(4)).
10. What details must be mentioned in the interest certificate?
The total interest payable on the borrowed capital. Interest payable on any subsequent loan taken for repayment of the original loan (Section 22(4)(a)-(b)).
11. Can I claim a deduction for interest paid to a foreign lender?
Only if tax has been paid or deducted on such interest in India (Section 22(6)(a)).
12. What if tax is not deducted on foreign interest payments?
The deduction is not allowed unless there is an agent in India (Section 22(6)(b)).
13. Can deductions be claimed for multiple properties?
Yes, but the total deduction for self-occupied properties cannot exceed ₹2 lakh (Section 22(5)).
14. Is the 30% standard deduction applicable to self-occupied properties?
No, it applies only to let-out properties.
15. Can I claim both 30% standard deduction and interest deduction?
Yes, but only for let-out properties.
16. If I take a top-up loan for home loan repayment, is interest deductible?
Yes, if used for the original loan repayment (Section 22(4)(b)).
17. Will deductions be reduced if already claimed under another provision?
Yes, deductions under Section 22(3) are adjusted to avoid duplication.
The Income Tax Act, 2025 provides various deductions under Section 22 for computing income from house property, primarily benefiting homeowners and landlords. The key deductions include:
- A standard deduction of 30% of the annual value for let-out properties.
- Interest deduction on borrowed capital up to ₹2 lakh (subject to conditions) or ₹30,000 in other cases.
- Pre-construction interest deduction allowed in five equal installments after completion.
- Mandatory certification from the lender to claim interest deductions.
- Restrictions on deductions for interest paid outside India if tax is not deducted or paid.
By leveraging these deductions effectively, taxpayers can optimize their tax liabilities on house property income while ensuring compliance with the Act.
