Want to save tax from your rental income? Know these 4 essential tips

With the looming deadline for filing Income Tax Returns (ITR), landlords are increasingly anxious about maximising their tax savings. 

Surprisingly, up to 90 percent of landlords might be missing out on valuable opportunities to save on their rental income taxes. 

To address this concern, here is a comprehensive guide with four key tips to help you maximise your tax savings. Let's dive into it:

Claim Standard Deduction

Make sure to take advantage of the standard deduction. You can deduct up to 30% of the Gross Annual Value (GAV) of your rental income for repairs and maintenance expenses.

This deduction can significantly reduce your taxable rental income.

Consider Joint Ownership

If possible, explore the option of joint ownership for your rental property.

By sharing ownership with another individual, you can effectively split the rental income, thereby reducing the tax burden for each owner.

Exclude Maintenance Charges

Encourage your tenants to pay maintenance charges directly to the relevant service providers.

By doing so, these charges will not be included in your reported rental income, leading to a lower taxable income for you as a landlord.

Leverage Vacancy Benefits

In the event that your rental property remains vacant for a certain period, consider utilising it as a self-occupied property for tax purposes.

This means you can claim it as such and potentially qualify for tax benefits, including deductions of up to 2 lakhs on home loan interest payments.

By implementing these strategies, you can optimise your rental income while simultaneously benefiting from valuable tax-saving opportunities.