Real estate and your tax return
Owning more than one home is a milestone, and the moment your name is on a second deed, the simple ITR-1 no longer fits. You move to ITR-2 (or ITR-3 with business income).
Why the form changes
ITR-1 allows income or loss from only one house property. Two or more, rented or empty, requires ITR-2.
How multiple houses are taxed
| Property type | How it is taxed |
|---|---|
| Self-occupied (up to 2) | Rent treated as nil; claim loan interest |
| Rented out | Declare rent; 30% standard deduction |
| Deemed let out (3rd plus) | Pay tax on notional rent |
On rented property you can claim a flat 30% standard deduction on net annual value under Section 24(a), plus home-loan interest (Source: Income Tax Act, Section 24).
The deemed-rent rule
You may treat up to two houses as self-occupied. A third (or more) is deemed let out: you compute a fair market rent and pay tax on that notional income, even if it sits empty.
Where to look (portal path)
- Log in at incometax.gov.in and open Services > Annual Information Statement (AIS), where tenant TDS on rent may appear.
- Start ITR-2 and fill the House Property schedule for each property.
What you should do
Gather every loan interest certificate and municipal tax receipt before you start the property schedules.
Common mistake
Forgetting deemed rent on an empty third house. The department still expects tax on its notional rent.
How LastMinute ITR helps
LastMinute ITR helps you assemble loan and rent details before you tackle the property schedules on the portal. Start at /file, import at /file/import/documents, and reconcile at /file/import/mismatch.
LastMinute ITR is a companion tool, not affiliated with the Income Tax Department. You file and e-verify your return yourself on incometax.gov.in.