Income Tax Bill 2025: The new rules have put an end to all the confusion regarding rental income and home loan exemption. Home owners will no longer have any problem in calculating tax and exemption.
After the Income Tax Bill 2025 was introduced in February 2025, there was confusion among homeowners regarding tax on rental income and home loan exemption. Now the new Income Tax Bill 2025 has clarified these things. It has been said that the rules for rental income and deductions from it will remain the same as before. Let us tell you that the new Income Tax Bill has been passed by both the Lok Sabha and the Rajya Sabha. Now the President’s approval is awaited.
After the bill was introduced in February, there was confusion as to whether tax on rental income would be levied on gross rent (total annual rent) or net rent (total rent minus municipal tax). Now it is clear that tax will be levied on net annual value, that is, the amount left after deducting municipal tax from the total rent will be taxed and 30 percent standard deduction will also be available on that.
Home loan deduction will also be available on rented houses.
Apart from this, earlier it was thought that pre-construction interest can be deducted only on self-occupied houses, but now it has been clarified that this deduction will be available on rented houses as well. This deduction can be made in 5 equal installments, starting from the year of getting possession.
When will it be implemented?
This new Income Tax Bill 2025 will replace the old 1961 law and will come into force from April 1, 2026. The aim of the new law is to simplify the tax process and remove previous shortcomings. According to the government, extensive changes have been made in the slabs and rates in the bill to benefit all taxpayers.