How to File Schedule HP in ITR-2: Complete Guide for FY 2024-25
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.
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:
- Actual rent received during the year
- 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.
| Item | Amount |
|---|---|
| Gross Annual Value | Rs. 3,00,000 |
| Less: Municipal taxes paid | Rs. 12,000 |
| Net Annual Value (NAV) | Rs. 2,88,000 |
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.
| Property Type | Deduction Limit |
|---|---|
| Let-out property | No limit (full interest deductible) |
| Self-occupied property | Rs. 2,00,000 per year |
| Deemed let-out | Full interest deductible |
Important: Only the interest component of your EMI is deductible under Section 24(b). The principal repayment goes under Section 80C.
Step 5: Calculate Taxable Income from House Property¶
Bring it all together:
| Calculation | Amount |
|---|---|
| Net Annual Value | Rs. 2,88,000 |
| Less: Section 24(a) @ 30% | Rs. 86,400 |
| Less: Section 24(b) home loan interest | Rs. 1,20,000 |
| Income from House Property | Rs. 81,600 |
This Rs. 81,600 is added to your total income and taxed at your applicable slab rate.
Multiple Properties¶
If you own more than one property:
- Only two self-occupied properties are allowed (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.
See our separate guide on NRI rental income and TDS for full details.
Common Mistakes to Avoid¶
- Forgetting municipal taxes: Only deductible when actually paid by you
- Claiming principal as interest: Only interest goes under Section 24(b)
- Missing pre-construction interest: Deductible in 5 equal instalments after possession
- Not declaring vacant properties: Properties you own beyond two must show notional rent
- Wrong ITR form: Use ITR-2 if you have house property income (not ITR-1, which has limits)
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