How to save tax on rental income?
The real estate business has really gained a lot of importance. And nowadays people have started giving their property on rent to earn some rental income. It has become a very common source of people’s side earning apart from their salary. However, rental properties are also chargeable to tax. So, if you want to save your rental income from being taxed here are some ways to it-
Municipal tax- You may not know this but your municipal tax can be deducted from your rental income. The only thing to keep in mind is that it should be paid by the owner. But if the municipal tax is paid by the tenants then such deduction won’t be available to you.
Standard deduction – In a case where you have purchased a property for investment and then you give it on rent, it will surely be subjected to some repair and maintenance. Irrespective of the amount you spend on the repairs you can claim a standard deduction which amounts to 30% of the net annual value.
Fully furnished properties – In the case of fully furnished properties you will surely provide some services like AC, newspaper, TV, etc. To save your tax all you need to do is either take the amount of these services separately, not including it in your rental income or you can also the tenant to pay for the services themselves. This will reduce your rental income and thus reduce the tax liability. There are some fully furnished flats on rent in Indore which you can look into if you are looking for some affordable flats.
Maintenance charges- Another way to reduce your rent is to exclude the maintenance charges from your rent.
These were some of the ways which you can keep in mind while renting a property to save your rental income from tax.
If you are the person who is looking for some apartments on rent, then, you can find some amazing and affordable properties in Indore. Dhillvistaindore offers you wide range of 1BHK, 2BHK, 3BHK rental apartments, and service apartments in Indore.