Tax deduction for second property


Will the standard deduction on a second property hold well even if I have not spent the money towards annual maintenance?


Yes irrespective of whether you spend the entire amount or not if you own a second property you are allowed to avail a 30% deduction for maintenance on the rental earnings. You can further deduct all municipal payments like property taxes etc from you rental earnings to reach your final taxable amount.


Hi Sooraj,

Earlier, in case of a house which is rented or ‘deemed rented’, 30% of the rental income was allowed as standard deduction. You could also include the municipal tax paid on the house and interest paid on the Home Loan taken for that house. Once you factor in these deductions, the rental income will be negative for most individuals and is called ‘loss from house property’. There was no limit to the amount of such loss that you could claim. However, from this year, you can claim only Rs. 2 lakhs under loss from house property. However, if you have incurred higher losses, you could carry it forward for 8 years and can set it off against income from house property.

BB Expert