Under the new Income-tax Act, 2025, Section 22 deals with deductions available while computing income under the head “Income from House Property.” This section is broadly similar to the old Section 24 of the Income-tax Act, 1961.
📋 What deductions are allowed under Section 22?
Section 22 allows the following deductions from the annual value of a house property:
💰 1. Standard Deduction – 30%
A flat deduction of 30% of the annual value of the property is allowed, irrespective of actual expenses incurred.
“Deduction” = 30% × “Annual Value”
This deduction covers expenses such as:
- Repairs
- Maintenance
- Painting
- Collection charges
No separate claim can be made for these expenses.
🏦 2. Deduction for Interest on Home Loan
If the property is acquired, constructed, repaired, renewed, or reconstructed using borrowed capital, the interest payable on such loan is allowed as deduction.
📊 Maximum Deduction Limit
| Particulars | Deduction Limit |
|---|---|
| Self-occupied property | ₹2,00,000 |
| In certain other cases | ₹30,000 |
The ₹2 lakh limit is available subject to prescribed conditions, such as completion of construction within the specified time period.
🏗️ 3. Pre-construction Interest
Interest paid before completion of construction is also allowed as deduction.
However, it cannot be claimed in one year. It is allowed in five equal instalments beginning from the year in which construction or acquisition is completed.
“Annual Deduction for Pre-construction Interest” = “Total Pre-construction Interest” / 5
📝 Practical Example
Suppose:
- Annual rental income = ₹6,00,000
- Municipal taxes paid = ₹20,000
- Home loan interest = ₹1,80,000
🧮 Computation
| Particulars | Amount (₹) |
|---|---|
| Gross Annual Value | 6,00,000 |
| Less: Municipal Taxes | (20,000) |
| Net Annual Value | 5,80,000 |
| Less: 30% Standard Deduction | (1,74,000) |
| Less: Interest on Loan | (1,80,000) |
| Income from House Property | 2,26,000 |
⚠️ Important Conditions
- Deduction for interest is available only if the taxpayer is the owner or co-owner of the property.
- Interest certificate from the lender may be required.
- If interest is payable outside India and tax has not been deducted where applicable, deduction may be disallowed.
🔄 Difference Between Old and New Law
| Old Income-tax Act, 1961 | Income-tax Act, 2025 |
|---|---|
| Section 24 | Section 22 |
| Deduction from house property income | Deduction from house property income |
| 30% standard deduction allowed | Continued |
| Home loan interest deduction allowed | Continued |
📅 Effective Date
The Income-tax Act, 2025 came into force from 1 April 2026.