How is tax on rental income worked out?

Rent is taxed on what is left after a repair and maintenance allowance and some expenses come off the gross rent. For assessment year 2026-27 the allowance is 25% of the rent for residential property and 30% for commercial property.

What else comes off

• municipal or land tax paid on the property;
• insurance premiums on the property;
• interest on a loan taken to buy or build it.

Rental income never goes below zero after these. What remains is added to your other income and taxed together.

In the detailed calculator, enter the rent (per month, for the months it was let), how the property is used and the expenses; the allowance is worked out for you.