Updated September 2026
Indian residential real estate investing runs on a structurally different return model than most Western markets, plus its own distinct tax mechanics — both genuinely change how to read the calculator's output for an Indian property, not just the currency.
Gross rental yields (annual rent ÷ purchase price) on Indian residential property are commonly cited in a roughly 2–4% range in many major cities — noticeably lower than yields commonly seen in many Western rental markets. This isn't a sign the market is broken; it reflects that Indian residential real estate has historically been approached more as a capital-appreciation and wealth-storage asset than a cash-flow-yield asset, with price appreciation expectations (and, for many buyers, considerations outside pure investment return) doing more of the work than rental income. Practically, this means the 1% rule and Western cash-on-cash return benchmarks generally don't transfer to the Indian market — a property yielding 3% gross isn't automatically a bad deal by local market standards, and comparing it against a US or UK cash-on-cash expectation would be comparing against the wrong benchmark entirely.
India requires tenants (under specified conditions and above certain rent thresholds) to deduct tax at source from rent payments before paying the landlord, remitting that amount directly to the tax authorities on the landlord's behalf — a mechanic with no direct equivalent in this calculator's US-centric default assumptions. This affects the landlord's actual cash received each month (it will be somewhat less than the full contracted rent, since TDS is withheld) even though the full rent amount is what should be entered as taxable rental income. Thresholds and rates are set by tax law and can change — confirm current TDS requirements with a tax professional if you're structuring a lease in India.
India's income tax law allows a deduction for home loan interest under Section 24, with different rules and caps depending on whether the property is self-occupied or let out, and rules around how any loss from house property can be set off against other income have also been subject to legislative caps and changes over time. This is analogous in spirit to the UK's Section 24 rules covered on the UK page in that it's a specific, non-obvious tax mechanic that meaningfully affects after-tax return — but the specifics are entirely different, so don't assume UK guidance applies here. An Indian chartered accountant is the right source for current caps and set-off rules for a specific property and income situation.
Property purchases in India involve stamp duty and registration charges, set by state governments and varying meaningfully by state (and in some cases by buyer category, such as gender-based concessions offered in some states) — generally a more substantial percentage of purchase price than in some other markets, and a real, cash-due-at-purchase cost that belongs in the calculator's "closing costs" field for an accurate total-cash-invested and cash-on-cash figure.
A meaningful share of Indian residential purchases, especially in growth markets, are under-construction properties rather than completed, rent-ready units — governed by RERA (Real Estate Regulatory Authority) registration and disclosure requirements that don't have a direct equivalent in this calculator, which assumes a property generating rent from day one. An under-construction purchase generally means a real gap between cash outlay (often via staged payments during construction) and any rental income at all — model that gap separately outside this calculator's single-snapshot format, since it isn't built to represent a multi-year pre-income construction period.
For a completed, rent-ready Indian property: enter actual contracted rent (not the net-of-TDS amount received), include stamp duty and registration in closing costs, and treat the resulting yield and cash-on-cash figures against India-specific market benchmarks rather than Western rules of thumb like the 1% rule.
Should I enter rent before or after TDS in the calculator? Enter the full contracted rent — that's the actual rental income and taxable amount; TDS is a withholding-and-remittance mechanic on the tenant's side, not a reduction in the rent itself.
Does the 1% rule apply in Indian metros? Generally no — typical gross yields in major Indian cities are usually well below what the 1% rule would require; see the 1% rule page for why it's a market-dependent heuristic, not a universal benchmark.
How do I model an under-construction purchase? This calculator assumes a completed, rent-generating property — for a staged-payment, under-construction purchase, model the pre-income construction period and payment schedule separately.
This page is educational only, not financial, tax, or legal advice. Indian real estate tax and regulatory rules vary by state and change over time — consult a qualified Indian chartered accountant and legal professional.