House Property Rental Income Tax: Statutory Deductions & Net Assessment
Sections 35-39 govern house property rent. 25% statutory repair deduction for residential and 30% for commercial premises. Deductions for municipal taxes, mortgage interest, and vacancy allowances.
- Residential rental income allows 25% automatic statutory repair and maintenance deduction.
- Commercial rental property allows 30% statutory repair and maintenance deduction.
- City corporation holding tax and land development taxes paid are fully deductible.
- Interest on bank loans taken for property purchase/construction is deductible.
- Vacancy allowance is claimable if portions remained demonstrably vacant.
1. Gross Annual Value and Statutory Deductions
Annual gross rental value is the higher of actual rent received or fair market rent. From this gross value, statutory repair and maintenance allowances are deducted without requiring invoices.
| Property Purpose | Statutory Repair Allowance | Invoice Requirement |
|---|---|---|
| Residential Housing / Flats | 25% of Annual Rent | No invoices needed |
| Commercial Offices / Shops | 30% of Annual Rent | No invoices needed |
| Industrial Warehouses | 10% of Annual Rent | No invoices needed |
(Scroll horizontally to view complete table data)
2. Other Allowable Expenses
In addition to statutory repair allowances, the following paid expenses can be deducted with payment proofs:
- •City Corporation Holding Tax / Municipal Tax
- •Land Development Tax (Khajna)
- •Insurance premium for building coverage
- •Mortgage/bank loan interest for construction or purchase
- •Vacancy allowance for unoccupied periods
Frequently Asked Questions (FAQ)
Q: What if tenants pay utility bills directly?
A: Direct tenant utility payments do not count toward rent received. Only pure rent is assessed.
Conclusion & Tax Tips
Maintaining accurate lease agreements, bank payment records, and municipal tax receipts ensures hassle-free tax filing for landlords.
All data, tax brackets, thresholds, and statutory interpretations in this article are compiled directly from the Bangladesh Income Tax Act 2023, Finance Ordinance 2026, and official NBR circulars.
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Related Tax Articles & Statutory Guides
Relevant statutory guidelines based on Income Tax Act 2023 & NBR circulars