Budget 2025: Major Tax Relief for House Properties
Finance Minister Smt. Nirmala Sitharaman presented the Union Budget 2025-26 on Feb 1, 2025, in the parliament. This budget brought many tax reliefs for middle-class taxpayers and business individuals. Many changes were made to indirect taxation.
This budget brings tax relief for house property owners. For persons owning multiple properties, they will now get a benefit under Budget 2025, as now the annual value for up to two self-occupied properties is nil. This will make tax compliance easier and leave more money in your pocket.
Earlier, you were required to pay tax on the second property you own whether you have rented it out or not. If you relocate to another city for work purpose you had to prove the self – occupation of your first property to avail the tax benefit.
Budget 2025 Proposal
This budget removes all these conditions, where previously, the taxpayers had to give reasons for the non-occupation of a second property, usually for business or employment purposes.
Removal of this condition leads to more money saving for the taxpayers in terms of tax, which helps them to invest this money in more house properties or anywhere else.
They can choose any two properties for self-occupation without any condition. This change has been a great relief for their pocket.
| Provision | Conditions | Annual Value of Property |
| Existing Provision | Occupation of the owner for the purpose of his residence: The owner cannot actually occupy it due to his employment, business or profession carried on at any other place | Nil (Only in respect of two houses) |
| New Provision (w.e.f. A.Y.25-6) | Occupation of the owner for the purpose of his residence: The owner cannot actually occupy it due to any reason | Nil (Only in respect of two houses) |
How much tax will be saved?
Let’s assume rent received from the second property is Rs. 25,000 per month.
Expected Annual Rent = Rs.25,000*12 = Rs.3,00,000
Less: Standard Deductions (30%) = Rs.90,000
Net Taxable Income = Rs.2,10,000
Tax Rate Applicable = Rs.30% (Assuming Taxpayer is in 30% Tax Bracket)
Tax on Deemed Rent = Rs.2,10,000*30% = Rs.63000
Add: Cess (4%) = Rs. 2520
Total Tax Saved = Rs.65,520
