Understanding Income Tax on Flats and Apartments in Thrissur

Posted onMar 03, 2026

When you are thinking of buying a flat inThrissur, you need to consider numerous factors, like location, configuration, layout, design, your budget, builder reputation, amenities, and more. While these are important, the most crucial factor you must be aware of is the income tax rate on your property.

Knowing the tax implications helps you plan your purchase better and budget wisely, and it should be one of the priorities in your Real estate investment strategies in Thrissur. This is especially so if you are serious about earning good returns by investing in property in the city.

Key Points to Remember

Home Loan Tax Benefits

If you purchase a house for self-occupancy through a loan, you can save money with the tax deductions allowed. 

• For interest on home loans, up to ₹2 lakh is deductible annually under Section 24
  
• For principal repayment, up to ₹1.5 lakh is deductible annually under Section 80C. 

How is Rental Income Taxed?

When rent out your flat, you will need to pay tax on the income earned. The rental income is clubbed with your other income, but you can claim 30% deduction for property maintenance. You are eligible for the same tax deduction on home loan interest.

If your annual rental income is ₹5,00,000:

• 30% standard deduction = ₹1,50,000
  
• Taxable rental income = ₹3,50,000. 

Your final tax liability depends completely on your income tax slab.

Renting out your apartments is a smart move to earn a passive income, especially in prime Thrissur locations like Poochatty and Swaraj Round.

Capital Gains Tax When Selling Property

When you hold property for some time and sell it when the price increases, you are liable to pay tax on the profits.

If you sell within two years of property purchase (short-term capital gains), your tax liability will be your normal slab.

If you sell after two years, you are liable to pay long-term capital gains tax at 12.5%; depending on the year of purchase, you may be able to claim indexation benefits.

Save Capital Gains Tax By

• Reinvesting the entire sale value in another residential property.
  
• Reinvesting the entire sale value in specified government bonds that lock the funds for 7 years.

Tax on Additional Homes

Some homeowners buy an additional house, either to hand over to children later or to use as a holiday home. Even if you keep that house vacant, only one property will be considered as self-occupied, and the other as rented out.

A notional rent on the second property will be fixed, and that income will become taxable. It is important to remember this if you plan a second house.

TDS on Property Purchase

Any property that is worth more than ₹50 lakh is taxed; the buyer has to adjust 1% as TDS and deposit that amount with the government. The seller gets proof of the TDS via a form 16B.

You may be aware that a lifestyle apartment in Thrissur is bound to cost over ₹50 lakh, which means you will need to deduct 1% as tax on the property. But you need not be overwhelmed. Respected builders in Kerala, like Varma Homes, offer complete guidance on these matters.

Difference Between Residential and Commercial Property Taxation

IT On Residences

• 30% standard deduction on rental income
• More benefits with home loans
• Less investment and steady rental demand

IT On Commercial Property

• Lucrative rental income
• Post-deductions, income is fully taxable 
• Higher risk of vacancy
• Complex loan structure

The rate of Income tax for commercial property is generally higher, with more complex rules.

Tax for Real Estate Agents

The income tax rate for a real estate broker depends on the total income earned in the year. Standard business income rules apply, and they are required to maintain proper accounts, pay advance tax, and file GST when applicable. 

Conclusion

Thrissur is fast emerging as one of the most preferred destinations for real estate investment in Kerala. With its traditional industries of gold and finance going strong, and the IT sector growing rapidly, the city is experiencing explosive growth. This is giving rise to exponential demand for real estate.

Varma Homes is one of the most sought-after builders in Kerala, and we have premium apartment projects in the best residential areas in Thrissur. Every project is RERA certified, features the best amenities you can find, and all our flats are well-designed and thoughtfully laid out. 

You can expect the best customer service from our team. Our experts can guide you skilfully regarding all legal, financial, and taxation matters. Expect the ultimate from Varma Homes.