ITR-4 Rent Rules: Are You Calculating Your Tax Right?

If you own a house and earn rent — or failed to collect rent — the new ITR-4 form has specific rules on how to report it. Get this wrong and you could overpay tax or face a notice from the Income Tax Department.

Here's what happened: ITR-4 now requires separate reporting of rental income from self-occupied property converted to let-out, including deemed rent calculations.. Unrealised rent — money your tenant owes but never paid — has special deduction rules under Section 25A that many taxpayers miss entirely.. The Income Tax Department updated ITR-4 fields this assessment year to capture house property income more precisely, reducing scope for under-reporting..

What you should do: Check your property status: if your house was vacant or partially rented in FY2024-25, declare it as 'deemed let-out' and compute annual value honestly.. Claim unrealised rent deduction under Section 25A only if you have written proof of tenancy and documented attempts to recover the unpaid rent.. Compare ITR-1 vs ITR-4 eligibility — if you have more than one house property with rental income, you may need to file ITR-2 instead of ITR-4..

Under Section 24(a), you get a flat 30% standard deduction on net annual rental income — no bills needed. Most small landlords forget to claim this, leaving real money on the table.