The deductions allowed from income from house property are:
1. Standard Deduction – Standard Deduction is 30% of the Net Annual Value calculated above. This 30% deduction is allowed irrespective of your actual expenditure on the property is higher or lower.
2. Deduction of municipal taxes paid on such property. They will be allowed on actual payment basis.
3. Deduction of Interest on Home Loan for the property – In case you take a home loan for purchase, construction, repair, renewal or reconstruction of your house property – the interest is allowed as a deduction from the Net Annual Value. (Max interest allowed is Rs 2 Lakhs)