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Aug 12, 2025
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Latest version of new tax bill, 2025 clarifies two key laws on income from house property
Clause 22 of the latest version of the New Income Tax Bill, 2025 has clarified two key laws relating to taxation of income from house property. The first clarification is regarding standard deduction of 30% from the annual value of a residential house property. The second clarification is about availability of tax deduction for pre-construction interest for home loan taken for construction of a house.
In the earlier version of the bill, this tax deduction for pre-construction interest and standard deduction were not explicitly clarified. Therefore, the Lok Sabha Select Committee had said:
“The Committee, after deliberations on Clause 22, identified the need to clarify the computation of deductions to enhance fairness and transparency for property owners. The Committee, recommend two key amendments:
firstly, in Clause 22(1)(a), to explicitly state that the standard 30% deduction is computed on the annual value after deducting municipal taxes; and
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