# Standard Deduction — Section 24(a)

After computing Net Annual Value (NAV), the Income-tax Act allows two deductions under Section 24: a flat statutory deduction (Section 24(a)) and interest on borrowed capital (Section 24(b)).

## Section 24(a) — The 30% Statutory Deduction

Rate: A flat 30% of NAV.
Applicable to: Let-out property and Deemed let-out property only.
NOT applicable to: Self-occupied property (because NAV = Nil; 30% of Nil = Nil).

## The 'No Other Expense' Rule

This 30% is an ad-hoc statutory deduction. It replaces all real expenses. The assessee CANNOT claim any further deduction for:

Insurance premium on the property
Electricity bills
Water charges
Repairs & maintenance (current or capital)
Collection charges
Salary of watchman/caretaker
Any other actual expense

It is allowed regardless of whether such expenses were actually incurred — even if expenses are zero, the 30% deduction stands.

Worked example

### Example 1

Question: GAV ₹4,00,000; Municipal Tax paid by owner ₹40,000. The assessee spent ₹50,000 on repairs and ₹10,000 on insurance. Compute deduction under Section 24(a).

Solution:

NAV = ₹4,00,000 – ₹40,000 = ₹3,60,000
Section 24(a) deduction = 30% × ₹3,60,000 = ₹1,08,000
Repairs (₹50,000) and insurance (₹10,000) are NOT separately deductible — they are deemed covered within the 30%.

⚠️ Common exam mistakes

Claiming actual expenses (repairs, insurance, electricity) in addition to the 30% deduction.
Computing 30% on GAV instead of NAV.
Allowing Section 24(a) on self-occupied property where NAV is Nil.

Bare-Act text Section 24(a) · Income-tax Act, 1961 · click to expand

Section 24(a): A sum equal to thirty per cent of the annual value shall be allowed as deduction.

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Standard Deduction under Section 24(a)

Worked example

⚠️ Common exam mistakes