These property owners get big income tax relief in Budget 2025

Budget 2025 has brought good news for individuals owning multiple properties. The provision to claim nil annual value for up to two self-occupied properties simplifies tax procedures and provides financial benefits.
Previously, owners faced taxation on their second property regardless of its occupancy status. The tax assessment was based on potential rental income, even when the property remained vacant. Individuals residing in rented accommodation in different cities for work purposes needed to provide evidence of self-occupancy of their first property to receive tax benefits.
"Previously, the taxpayers had to justify the non-occupation of second property, usually for employment or business reasons. Removing this requirement reduces compliance hassles," Ravi Shankar Singh, MD of Residential Transaction Services at Colliers India was quoted as saying by ET.
How much tax will you save?
Assuming a rent of Rs.25,000 per month from second property

"If you are not actually living in your property, you benefit to a great extent now. There is no need to provide proof for work relocations. It's a huge relief, especially for professionals juggling jobs across cities," confirms Delhi-based Chartered Accountant Manoj Pahwa.
Consider the case of Delhi-based legal professional, Abhijeetam Upadhyay, who previously paid Rs. 10,000 monthly tax on his vacant Gurugram property. "Now, I get to pocket that money," he says with a smile. "The benefits of this move extend beyond financial terms. It will encourage parents like me to invest their hard-earned money in buying a house for their children in advance," he adds.
The financial impact is substantial for various property owners. "I used to pay Rs. 65,520 annually as tax on deemed rental income. This change has brought me significant savings," says Chartered Accountant Sachin Garg. "The annual value for determining income from my second property was approximately Rs.9 lakh, which will not be offered to tax as per the new provision," shares Noida-based Mukul Mathur. "This means I get to save close to Rs.1.8 lakh in tax on this property."
The modification benefits both individual finances and the property sector, with industry specialists projecting positive developments.
The adjustment is anticipated to boost residential property investment. Anuj Puri, Chairman of ANAROCK Group, remarks, "This will spur homeownership and investment in both primary and secondary housing markets."
The change is expected to increase interest in holiday properties and additional residences. Sandeep Ahuja, CEO of Atmosphere Living, comments, "Earlier, taxation made owning a second house less attractive. Now, taxpayers can enjoy their holiday homes without the financial penalty, making such investments more appealing for them."
The elimination of deemed rental income taxation resolves a long-standing issue. "This change is expected to enhance affordability for homebuyers, support the rental housing market, as well as fuel the demand in tier 2 and tier 3 cities in the country," adds Puri.