Skip to content

Budget 2017: Calculate Revised Return from Your Rental Income

The rent received from a house property is treated as income and taxed as per slab. However, certain deductions are eligible for this taxable amount. Budget 2017  had restricted the amount of deduction one can claim. Here is an illustration and a revised real estate returns calculator.

The taxable income is given by:  rent - (loss from house property)

Loss from house property (old rule)

loss from house property = Rental income - (corporation+water/sewage tax) - (standard deduction) - (interest component of home loan)

This entire amount can be set off from salary income.

Standard deduction = 30% of  (rent - taxes)

Loss from house property (new rule)

The loss from house property (calculated as above) has a ceiling of Rs. Two Lakhs.

"However, the unabsorbed loss shall be allowed to be carried forward for set-off in subsequent years in accordance with the existing provisions of the Act".

This implies the maximum tax one can save = 2,00,000 x tax slab (+cess).

Earlier there was no limit on the tax that one can save.

I have now modified the real estate returns calculator to account for this new rule.

Suppose you have purchased a property on a loan and let out on rent, it will take into account, tax benefits,  expenses and rental income to give the annualised return year after year. So it can be used to calculate when one will break-even.  It can also be used if the property is fully paid for.

You can Download the Feb 2017 Real Estate Returns Calculator and read more about how it works here.

Related post: Five reasons why I will never invest in real estate

Pune Investor Workshop Feb 26th, 2017

The second Pune workshop will be held on Feb 26th, 2017. You can register for this via this link

You Can Be Rich Too With Goal-Based Investing

The best book ever on Finanical Freedom Planning. Go get it now!

Your first investment should be buying this book

The (nine online) calculators are really awesome and will give you all possible insights

Thank you, readers, for your generous support and patronage.

Amazon Hardcover Rs. 319.99. 20% OFF

Kindle at Amazon.in (Rs. 244.30)

Google Play Store (Rs. 244.30)

Now just Rs. 307 use love10 to get additional 10% OFF.   at Infibeam

If you use a mobikwik wallet, and purchase via infibeam, you can get up to 100% cashback!!

  • Ask the right questions about money
  • get simple solutions
  • Define your goals clearly with worksheets
  • Calculate the correct asset allocation for each goal.
  • Find out how much insurance cover you need, and how much you need to invest with nine online calculator modules
  • Learn to choose mutual funds qualitatively and quantitatively.

More information is available here: A Beginner's Guide To Make Your Money Dreams Come True!

What Readers Say

Also Available At

Bookadda Rs. 371. Flipkart Rs. 359

Amazon.com ($ 3.70 or Rs. 267)

Google Play Store (Rs. 244.30)

Subscribe to get posts via email

Your subscription is successful if you are directed to the "Welcome Page"

Install Financial Freedom App! (Google Play Store)


Install Freefincal Retirement Planner App! (Google Play Store)


Find out if you have enough to say "FU" to your employer (Google Play Store)


You Can Be Rich Too With Goal-based Investing A book that can help you ask the right questions about money and find simple solutions. Comes with nine online calculator modules. Read more about the book and order now! 

GameChanger - Forget Startups, Join Corporate & Still Live The Rich Live You want Take that international trip at 50% lower costs! Optimise credit card usage! Set money management on auto-pilot! Read more about the book and order now!

About Freefincal

Freefincal has open-source, comprehensive Excel spreadsheets, tools, analysis and unbiased, conflict of interest-free commentary on different aspects of personal finance and investing. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. We do not accept sponsored posts, links or guest posts request from content writers and agencies.

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete  the entire comment or remove the links before approving them.

6 thoughts on “Budget 2017: Calculate Revised Return from Your Rental Income

  1. Navneet

    For properties purchased in the past, does the calculator cater for set off of unlimited loss till 31/03/17 and loss limited to 2 lakh wef 01/04/17?

    Reply
  2. Pushkar

    This is not related to post.
    I received an email from no_reply(at)cibil.com

    It was in junk email folder. But when I checked the actual link it refers to www(dot)cibil(dot)com/mailer/fcsr/freecibilscorereport/, it seems legitimate.

    Has anyone availed free cibil report ? @Pattu, can you write any post on it ? If one should avail it or not any pros and cons ?

    Thanks,

    Reply

Do let us know what you think about the article

%d bloggers like this: