Rental Property ROI Calculator India
Calculate total return on your Indian real estate investment — combining rental income, capital appreciation, stamp duty, and NRI taxes.
Investment details
How to Calculate ROI on Rental Property in India
Real estate Return on Investment (ROI) measures the total profitability of an asset relative to its acquisition and ongoing carrying costs. In India, a comprehensive property ROI calculation incorporates two primary drivers:
Gross annual rent minus vacancy loss (typically 5–10%), maintenance, property taxes, and Section 195 TDS.
Compounded annual property growth over the holding period minus Long-Term Capital Gains (LTCG) tax at exit.
Frequently Asked Questions
How do you calculate ROI on a rental property in India?
Rental Property ROI in India is calculated as: Total ROI (%) = [(Total Net Rental Income over hold period + Net Sale Value after LTCG Tax - Initial Total Investment) ÷ Initial Total Investment] × 100. Total investment includes purchase price, stamp duty, registration fees, and upfront furnishing costs.
What is a good ROI for residential property in Indian metros?
A healthy annualized Return on Investment (CAGR) for Indian metro residential real estate ranges from 9% to 14%, combining a 2.5%–4% traditional rental yield (or 8%–12% managed Airbnb yield) and 6%–10% annual capital appreciation.
How does Long-Term Capital Gains (LTCG) tax affect real estate ROI in India?
When selling a property held for more than 24 months, the net capital gain is subject to LTCG tax. Under current Indian tax laws, LTCG on immovable property is taxed at 20% (or 12.5% without indexation under recent budget provisions). Factoring LTCG tax is essential for an accurate net ROI projection.
How does NRI TDS (Section 195) impact annual rental returns?
For NRI property owners, tenants are legally required to deduct 31.2% TDS on monthly rent under Section 195. However, NRIs can claim the 30% statutory house property deduction under Section 24 and recover excess TDS by filing an annual Indian Income Tax Return (ITR-2).