Rental Yield & Property Income Calculator 2026

Gross Rental Yield is (Annual Rent / Property Purchase Price) × 100. Net Rental Yield subtracts property taxes, maintenance costs, and vacancy periods from annual rent before dividing by property price. In Indian metro cities, residential rental yield is typically 2.5% to 3.5%, while commercial property yield is 6% to 9%.

Section 24(a) gives a flat 30% deduction on the net annual value of a let-out property for repairs and upkeep, whether or not you actually spent anything. The important part is that it survives under the new tax regime, which is the default under section 115BAC. The new regime removes section 24(b) on a self-occupied house and 80C on principal, but the 30% standard deduction on rental income stays. On Rs 4 lakh net annual value that is Rs 1.2 lakh off the taxable rent in either regime.

Yes, on a let-out property. The new regime is the default under section 115BAC and it removes section 24(b) entirely for a self-occupied house, but a let-out property keeps the uncapped interest deduction against rental income. The catch is the set-off rule: if interest exceeds the net annual value, the resulting loss from house property cannot be set off against your salary at all under the new regime. It is carried forward for eight years and can only be adjusted against future house property income.

An individual or HUF tenant not subject to tax audit must deduct TDS under section 194-IB when monthly rent exceeds Rs 50,000. The rate is 2% following the Finance Act 2024 change from 5%, deducted once in the last month of the tenancy or the financial year, and paid using Form 26QC with no TAN required. Businesses and audited entities deduct instead under section 194-I at 10% on rent above Rs 2.4 lakh a year. Match the credit in your Form 26AS before filing.

Budget one to two months of vacancy a year between tenants, which is 8% to 16% of gross rent, and longer in an oversupplied micro-market. Society maintenance in a Mumbai or Bengaluru gated project runs Rs 3 to Rs 5 per square foot a month, often Rs 4,000 to Rs 7,000 on a 2BHK, and is payable even when the flat is empty. Add municipal property tax, brokerage of half to one month of rent per tenant change, and about Rs 20,000 a year for repainting and repairs.

Capital values in Indian metros were bid up by buyers expecting appreciation and by end-users chasing ownership, while rents track salaries, which grow far more slowly. A Rs 1.2 crore flat in Bengaluru commonly rents for Rs 32,000 to Rs 38,000 a month, which is a gross yield near 3.5% and closer to 2.5% net after maintenance, tax and vacancy. Commercial and warehousing assets yield 6% to 9% because tenants are businesses on long leases with escalation clauses.

Start with gross annual rent received, subtract municipal taxes actually paid by you during the year to get net annual value, then deduct 30% of that under section 24(a) and the full home loan interest under section 24(b). What remains is added to your total income and taxed at slab rate. On Rs 4.2 lakh rent with Rs 20,000 municipal tax, NAV is Rs 4 lakh, the 30% deduction is Rs 1.2 lakh, and you are taxed on Rs 2.8 lakh less interest.