Notional rent is the rent that you are assumed to have earned under the Income Tax Act, 1961 even if you don’t actually earn any rent on a property. It is calculated using the concepts of fair rent, municipal value and standard rent. To calculate the expected rent, take the higher of the fair rent and municipal value. Compare this figure with the standard rent, and take the lower of the two; in this case, the fair rent is lower. Tax you payYou get a standard deduction of 30% when calculating the tax you pay on notional rent under Section 24 of the Income Tax Act.

Source: Mint February 18, 2019 02:37 UTC