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Income-tax Act, 1961 · Chapter IV: Computation of Total Income · C.—Income from house property

Section 24: Deductions from income from house property

The Income-tax Act, 1961 was repealed by the Income-tax Act, 2025 from 1 April 2026. The text is kept here because the judgments below apply it.

In plain words

Income from house property is computed after these deductions: a standard deduction of thirty per cent of the annual value, and interest on money borrowed to buy, build, repair or renew the property.

  • The thirty per cent deduction is allowed whatever the actual repair costs are.
  • For a self occupied house whose annual value is nil, the interest deduction is capped at thirty thousand rupees.
  • That cap rises to two lakh rupees if the loan was taken on or after 1st April 1999 and the house is acquired or built within five years from the end of the year of borrowing.
  • Interest for the period before the property was acquired or built is allowed in five equal instalments, in that year and the four following years.
  • The higher limit needs a certificate from the lender showing the interest payable.

A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.

Official text

Income chargeable under the head —Income from house property‖ shall be computed after making the following deductions, namely:—

(a) a sum equal to thirty per cent. 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:

Provided that in respect of property referred to in sub-section (2) of section 23, the amount of deduction shall not exceed thirty thousand rupees:

Provided further that where the property referred to in the first proviso is acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and such acquisition or construction is completed [within [five years] from the end of the financial year in which capital was borrowed], the amount of deduction under this clause shall not exceed [two lakh rupees].

Explanation.—Where the property has been acquired or constructed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior to the previous year in which the property has been acquired or constructed, as reduced by any part thereof allowed as deduction under any other provision of this Act, shall be deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years:] [Provided also that no deduction shall be made under the second proviso unless the assessee furnishes a certificate, from the person to whom any interest is payable on the capital borrowed, specifying the amount of interest payable by the assessee for the purpose of such acquisition or construction of the property, or, conversion of the whole or any part of the capital borrowed which remains to be repaid as a new loan.

Explanation.—For the purposes of this proviso, the expression —new loan‖ means the whole or any part of a loan taken by the assessee subsequent to the capital borrowed, for the purpose of repayment of such capital.]

Source: India Code (Legislative Department), the text of the Act as it stood before its repeal. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.

Supreme Court judgments citing the section 24