How to File Schedule HP in ITR-2: The Complete Landlord Guide

If you earn rental income from a property in India, you must report it under Schedule HP (House Property) in ITR-2. This guide walks you through every field — from calculating Net Annual Value to claiming your Section 24 deductions — so you file correctly and pay only what you owe.

Try it now: Use our free Schedule HP Calculator to compute your exact NAV and Section 24 deductions in under a minute.

Which Financial Year Are You Filing For?¶

• FY 2025-26 (AY 2026-27): The regular deadline of 31 July 2026 has passed. You can still file a belated return until 31 December 2026 under Section 139(4), with a late fee of Rs. 1,000 (income up to Rs. 5 lakh) or Rs. 5,000 (above Rs. 5 lakh). Interest under Section 234A applies on any unpaid tax from 1 August 2026.
• FY 2026-27 (AY 2027-28): The financial year currently in progress. The rules below apply to income you're earning right now, filing next July.

The Schedule HP structure and Section 24 rates have not changed for either year — this guide applies to both.

What is Schedule HP?¶

Schedule HP is the section of ITR-2 where you declare income from house property. The Income Tax Act treats rental income differently from salary or business income — it allows a flat 30% deduction before you even start, plus a deduction for home loan interest.

You need to fill Schedule HP if:

• You own one or more residential or commercial properties
• You earned rent from a tenant during the financial year
• Your property was deemed let out (you own more than two properties)

Step 1: Calculate Gross Annual Value (GAV)¶

Gross Annual Value is the higher of:

1. Actual rent received during the year
2. Municipal value or fair rent (whichever is higher), subject to standard rent

Example:
- Monthly rent: Rs. 25,000
- Annual rent received: Rs. 3,00,000
- Municipal value: Rs. 2,40,000

GAV = Rs. 3,00,000 (actual rent is higher)

Step 2: Deduct Municipal Taxes¶

Subtract any municipal taxes (property tax) actually paid during the year.

Municipal taxes are only deductible if you (the owner) paid them — not if your tenant paid them.

Step 3: Section 24(a) — Standard Deduction¶

The Income Tax Act allows a flat 30% deduction on NAV, regardless of your actual expenses. This covers repairs, maintenance, insurance, and other costs. You do not need bills or receipts.

Standard Deduction = 30% × NAV
                   = 30% × Rs. 2,88,000
                   = Rs. 86,400

This deduction is available for all let-out properties. There is no cap.

Step 4: Section 24(b) — Home Loan Interest¶

If you took a home loan for the property, you can deduct the interest paid during the year.

Important: Only the interest component of your EMI is deductible under Section 24(b). The principal repayment goes under Section 80C — and Section 80C is not available under the new tax regime, which is the default from FY 2023-24 onward.

Step 5: Calculate Taxable Income from House Property¶

Bring it all together:

This Rs. 81,600 is added to your total income and taxed at your applicable slab rate.

Old vs New Regime — Which Should You Pick?¶

Since FY 2023-24, the new tax regime is the default. Both regimes allow Schedule HP deductions under Section 24 for let-out properties — this is not a differentiator.

The real differences that matter for landlords:

If your house property produces a loss (interest > rental income after deductions) and you claim self-occupied treatment, the old regime typically wins. If your properties are all let-out and profitable, the new regime usually wins because of the higher slab thresholds.

Multiple Properties¶

If you own more than one property:

• Up to two properties can be treated as self-occupied (Budget 2019 onwards)
• All remaining properties are deemed let out — you must show notional rent as income even if they are vacant
• Each property gets its own Schedule HP calculation
• Losses from one property can be set off against income from another

NRI Landlords: Section 195 TDS¶

If you are an NRI (Non-Resident Indian), your tenant is legally required to deduct TDS at 31.2% (30% + 4% cess) on every rent payment under Section 195. There is no minimum threshold — TDS applies from the first rupee.

You can claim credit for TDS deducted when filing your ITR. If your actual tax liability (after treaty benefits under DTAA) is lower than 31.2%, you will get a refund.

For the full mechanics — including the correct form (27Q, not 26QB), DTAA rates, and how to apply for a lower deduction certificate under Section 197 — see our detailed Section 195 TDS guide for NRI landlords.

Common Mistakes to Avoid¶

1. Forgetting municipal taxes: Only deductible when actually paid by you
2. Claiming principal as interest: Only interest goes under Section 24(b)
3. Missing pre-construction interest: Deductible in 5 equal instalments after possession
4. Not declaring vacant properties: Properties you own beyond two must show notional rent
5. Wrong ITR form: Use ITR-2 if you have house property income (not ITR-1, which has limits)
6. Missing the belated return window: If you missed 31 July 2026 for FY 2025-26, file by 31 December 2026 — after that, you lose the right to file for that year

Automate Schedule HP with RealAssist¶

Calculating NAV, tracking municipal tax payments, separating interest from principal, and generating the Schedule HP summary is tedious — especially across multiple properties.

RealAssist does all of this automatically:

• Tracks rent received vs. expected for each property
• Stores home loan interest entries per financial year
• Computes Section 24(a) and 24(b) deductions instantly
• Generates a Schedule HP PDF you can hand directly to your CA

Start free — no credit card required →