The Union government has released the latest draft of the New Tax Bill, 2025, bringing long-awaited clarity on the treatment of income from house property. Tax experts say the updated provisions aim to simplify compliance for homeowners while addressing ambiguities that often caused disputes between taxpayers and authorities.
The first major clarification relates to self-occupied properties. Under the revised draft, individuals owning up to two self-occupied residential units will not have to declare notional rent on the second property. This addresses a persistent concern among middle-class families who often maintain a second home for professional or family-related reasons but were taxed on its presumed rental value.
The second clarification focuses on deductions for interest on housing loans. The Bill reaffirms that taxpayers can continue to claim deductions up to the prescribed limit on interest paid for loans taken to purchase or construct a house, even if construction extends beyond the earlier stipulated timeframe. This provision is expected to bring relief to buyers facing project delays.
Tax practitioners believe these changes will reduce litigation, enhance transparency, and make property taxation more taxpayer-friendly. The government has also emphasized its intention to make income-tax rules simpler, digital-friendly, and equitable, aligning with the larger goal of easing compliance for individuals and businesses alike.
Key Highlights
No notional rent will be levied on a taxpayer’s second self-occupied house.
Housing loan interest deductions remain available despite project delays.
The reforms aim to simplify tax rules and cut down on disputes.
Taxpayers stand to benefit from greater clarity and relief.
Authorities expect better compliance with reduced litigation.
Who Should Take Action – Specific Advice
Homeowners with multiple residential properties should review their tax filings in light of the updated provisions. Individuals with ongoing housing loans should consult tax professionals to maximize available deductions. Real estate investors and tax advisors must stay updated on the Bill’s progress to align strategies with the new legal framework.
India Advocacy Insight
The New Tax Bill, 2025 reflects a balanced approach between government revenue needs and taxpayer relief. By clarifying long-disputed provisions on house property, the law is poised to encourage trust and voluntary compliance. At India Advocacy, we believe these reforms will strengthen India’s tax framework, making it fairer and more transparent for the common taxpayer.
