Notional Rent

Notional rent refers to the deemed rental income that could have been earned from a property if it were rented out, even though it is not actually let out. Under Section 23 of the Income Tax Act, the annual value of a self-occupied property is treated as nil, meaning no notional rent is taxable. However, if an individual owns more than one self-occupied property, only one can be treated as self-occupied (with nil annual value), and the others are considered deemed to be let out—for which notional rent is calculated and taxed under “Income from House Property.” Example: If you own one self-occupied house, no rental income (notional rent) is added to your taxable income. But if you own two houses and both are self-occupied, you can treat one as self-occupied (no tax), while the other will be considered deemed let out, and notional rent will be taxable

Understanding notional rent and deemed let-out property rules can be complex, especially when owning multiple houses. Professional tax return services can help you accurately compute annual value, deductions, and ensure proper compliance under Section 23 of the Income Tax Act.

If you are unsure how notional rent applies to your second property, consulting an experienced income tax consultant online can help you determine the correct annual value and minimize tax liability while staying fully compliant with income tax regulations.

Calculating notional rent involves understanding municipal value, fair rent, and standard rent limits. Opting for online tax consultation ensures proper valuation, accurate reporting under “Income from House Property,” and avoidance of unnecessary tax notices or penalties.