Income from house property: deductions for a percentage of NAV and interest on borrowed capital reduce taxable income. Income from house property for a let-out property is computed by deducting municipal taxes from Gross Annual Value to arrive at Net Annual Value (NAV). From NAV, allowable deductions comprise a standard deduction at a fixed percentage of NAV and a deduction for interest on borrowed capital. The remainder after these deductions is the income chargeable under the head Income from House Property.