Rental Yield Calculator India 2026 — Gross & Net Property ROI

A gross rental yield of 3–4% is considered average in India. Above 4% is good, and above 5% is excellent. City benchmarks for Q1 2026: Chennai 4.87% (highest metro), Hyderabad 4–6% (IT corridors), Bangalore 3.5–5.5% (varies by micro-market), Pune 3–4.5%, Delhi NCR 2.5–4%, Mumbai 2–2.6% (lowest due to high property prices). Net yield after expenses (maintenance, vacancy, property tax) is typically 1–1.5% lower than gross yield.

Gross rental yield = (Annual rent ÷ Property value) × 100. It ignores all expenses. Net rental yield = ((Annual rent − Annual expenses) ÷ Property value) × 100. Expenses include property maintenance (1–2% of property value/year), society charges, property tax, vacancy losses (usually assume 5–10% vacancy), insurance, and brokerage for tenant finding. Net yield is a more realistic measure of actual returns.

Yes. Rental income is taxable in India under 'Income from House Property.' However, you get a standard deduction of 30% of net annual value (after deducting municipal taxes). Additionally, home loan interest paid is deductible (up to ₹2L for self-occupied; no limit for let-out property for loans taken before April 2017). TDS at 10% is deducted by tenant if rent exceeds ₹50,000/month.

Net rental yield in India (2–4%) is lower than: Fixed deposits (6.5–7.5%), Liquid mutual funds (6–7%), and SIP in equity funds (historical 12–15% CAGR). However, property also offers capital appreciation (typically 5–10% per year in growth markets) and is a tangible asset. Total return from property = rental yield + capital appreciation. A property yielding 3% rent + 8% appreciation = 11% total return, comparable to equity. The debate depends heavily on city, micro-market, and holding period.