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About this tool
Gross and net rental yield on a property after vacancy, maintenance, municipal tax and income tax on house property.
Rental yield is the annual rent a property earns expressed as a percentage of what the property cost you, and this calculator works out both the gross figure and the net figure that survives vacancy, society charges, municipal tax and income tax. The tax layer follows the Income from house property head of the Income-tax Act, 1961 — municipal taxes paid are deducted from gross annual value, then a flat 30% standard deduction under Section 24(a), then interest on borrowed capital under Section 24(b). It is built for landlords and first-time property investors who want to compare a flat against a fixed deposit or an index fund on a like-for-like after-tax basis.
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Enter the values you already know.
Fine-tune the options to match your scenario.
Read the result and use it in your planning or reporting.
The headline gross yield and the net after-tax yield appear together, so the gap between the brochure number and the real one is obvious.
Applies the 30% standard deduction, the Section 24(b) interest deduction and the 2 lakh set-off cap under Section 71(3A) rather than a flat guess.
Vacant weeks, society maintenance, municipal tax, insurance and a management fee all feed the net operating income, which is where most yield estimates go wrong.
Residential rental yields in Indian metros typically sit between 2% and 4% gross, and commercial or retail property runs roughly 6% to 9% gross. After vacancy, maintenance and tax, a residential net yield above 3% is doing well, which is why most residential buyers depend on capital appreciation rather than rent for their return.
Gross yield is annual rent divided by the property price, with nothing deducted. Net yield subtracts the money you actually spend — vacant periods, society charges, repairs, municipal property tax, insurance, any management fee — and the income tax on the rent, then divides by the total capital you put in including stamp duty and registration.
Rent is taxed under Income from house property. Municipal taxes actually paid are deducted from the rent received to give net annual value, a flat 30% of that is allowed as a standard deduction under Section 24(a) with no bills required, and home loan interest is deducted under Section 24(b). The balance is added to your total income and taxed at your slab rate.
Yes, but only up to 2,00,000 in a financial year under Section 71(3A). Any unabsorbed loss beyond that is carried forward for up to eight assessment years and can then be set off only against house-property income. This is general information — confirm your own position with a chartered accountant.
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