1) Rental Income are allowed Standard deduction of 30% or Actual expenses on maintaining the property which ever is higher.
2) you can deduct Property Tax from the same
3) Water charges are also deductible
4) Loan Interest is also deductible if any taken for buying this property can be claimed on actuals.
Example: Property given on leave and license fetches Anual rental income of Rs 1,20,000 (Rent of Rs 10,000 per month) with water charges of Rs 1,000 per annum and Property Tax of Rs 6,000 per annum.
Taxable Income comes out to be
Taxable Income = 1, 20,000 - (0.3)1,20,000 - 1000 - 6000 = 77,000
so instead of paying tax on Rs 1,20,000 you have to pay tax only on Rs 77,000