Section 22 — Deductions from income from house property. Successor to s.24, s.25 of the 1961 Act.
Section 22 is in Chapter IV — Computation of Total Income, which runs from section 13 to section 95.
Sub-section (1) gives the three deductions from income under the head "Income from house property": (a) a flat 30% of the annual value as determined under section 21; (b) interest payable on capital borrowed to acquire, construct, repair, renew or reconstruct the property; and (c) interest for the period before the tax year in which the property was acquired or constructed, allowed in five equal instalments beginning with that tax year and running through the four following tax years. Sub-section (2) caps the interest under (b) and (c) for property of the kind referred to in section 21(6) at Rs. 2,00,000, but only where acquisition or construction is completed within five years from the end of the tax year in which the capital was borrowed and the assessee furnishes a certificate from the lender; failing those conditions the cap drops to Rs. 30,000. Sub-section (3) requires the pre-period interest under (1)(c) to be reduced by anything already allowed as a deduction elsewhere in the Act, sub-section (4) prescribes what the certificate must state (including interest on any new loan taken to repay the original borrowing), and sub-section (5) caps the aggregate of all sub-section (2) deductions across all section 21(6) properties at Rs. 2,00,000. Sub-section (6) disallows interest payable outside India where tax has not been paid or deducted on it under Chapter XIX-B and there is no agent in India as per section 306.
The 30% allowance replaces any proof of repairs and collection costs with a fixed figure, and the interest limbs relieve the real cost of financing the property. The monetary caps and the completion and certificate conditions in sub-section (2) confine the larger interest relief to section 21(6) property acquired or built within a defined window and evidenced by the lender, and sub-section (6) stops interest leaving India untaxed while still being deducted.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Standard deduction from annual value | 30% | Of the annual value as determined under section 21, not of rent received | 22(1)(a) |
| Pre-acquisition or pre-construction interest | Five equal instalments | For interest payable for the period prior to the tax year of acquisition or construction; taken in that tax year and each of the four immediately succeeding tax years | 22(1)(c) |
| Cap on aggregate interest deduction under (1)(b) and (c) | Rs. 2,00,000 | Only for property referred to in section 21(6), and only where acquisition or construction is completed within five years from the end of the tax year in which the capital was borrowed and a lender's certificate is furnished | 22(2)(a) |
| Completion window for the higher cap | Five years | From the end of the tax year in which the capital was borrowed, not from the date of borrowing | 22(2)(a)(i) |
| Cap where the sub-section (2)(a) conditions are not met | Rs. 30,000 | In any other case | 22(2)(b) |
| Overall ceiling across properties | Rs. 2,00,000 | Aggregate of sub-section (2) deductions in respect of all properties of the nature referred to in section 21(6) | 22(5) |
The 30% comes off automatically once annual value is fixed under section 21; nothing has to be spent or proved to claim it. To get the Rs. 2,00,000 interest figure on a section 21(6) property you need both the five-year completion and a certificate from the person to whom the interest is payable stating the interest on the borrowed capital and on any refinancing loan — without them the deduction collapses to Rs. 30,000. Because sub-section (5) applies the Rs. 2,00,000 to the aggregate across such properties, owning more than one does not multiply the limit. Interest remitted abroad has to have been subjected to deduction or payment of tax under Chapter XIX-B, or there must be an agent in India under section 306, or it is simply not allowed.
An individual lets a house whose annual value under section 21 is Rs. 6,00,000; clause (1)(a) hands him Rs. 1,80,000 — 30% of that annual value — whether or not he spent a rupee on repairs. He also holds a property of the kind referred to in section 21(6) on which interest of Rs. 2,60,000 is payable, but construction was completed only in the sixth year after the end of the tax year in which the capital was borrowed, so the condition in sub-section (2)(a)(i) fails and the ceiling collapses from Rs. 2,00,000 to the Rs. 30,000 in clause (b). Interest of Rs. 5,00,000 for the years before construction comes in five equal instalments of Rs. 1,00,000 under clause (1)(c), and owning a second such property would not double the Rs. 2,00,000 — sub-section (5) makes it an aggregate ceiling across all section 21(6) properties.
In the return, in the computation of income under the head “Income from house property”, and in the intimation or assessment order that restricts the interest claim. The section names no form and no authority, but it does name a document you must hold: the certificate from the person to whom the interest is payable, whose contents sub-section (4) fixes.
The aggregate of the amounts of deduction under sub-section (2) in respect of properties of the nature referred to in section 21(6) shall not exceed Rs. 200000.
See the full 1961 to 2025 concordance.
See every circular and notification on this section, or the circulars index.
See every circular and notification on this section, or the notifications index.
