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Loss on house properrty

satyanarayana vera venkata gam (senioraccounts officer) (27 Points)

02 February 2017

its may please be clarified that loss on house property for a rented house is limited to 200000. it was mentioned that more than 200000 can be carriforwarded. but the intrest on house building advance will feature every year. as such it shoould be carry farworeded until the intrest payment is completed.

please clarify

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 02 February 2017


	its may please be clarified that loss on house property for a rented house is limited to 200000. it was mentioned that more than 200000 can be carriforwarded. but the intrest on house building advance will feature every year. as such it shoould be carry farworeded until the intrest payment is completed.

No. For rented house the interest paid over home loan is fully deductible u/s. 24b.

Any loss from HP is allowed to be adjusted against other income heads.

manoj (student) (5205 Points)
Replied 02 February 2017

Agree with Sir

1 Like

Udgam Koomar (Tax Technologist) (1949 Points)
Replied 02 February 2017

Yes adjustment with other heads is allowed.

vaibhav (student) (253 Points)
Replied 03 February 2017

Sir,

I have still doubt due to recent amendment.

I assume that they have curtail maximum deduction upto Rs. 2 lac only and rest amt will be carry forwarded as per IT Act.

For example, Directors draws handsome amt of remuneration frm company. If it can be set off against any income head than introduction of this section have no use.

Kindly advise.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 03 February 2017

"I assume that they have curtail maximum deduction upto Rs. 2 lac only and rest amt will be carry forwarded as per IT Act."

True, but in case of self occupied property.

For rented property there is no limit.

CA Neha Agrawal (CA) (825 Points)
Replied 03 February 2017

Carry forward arises when repayment is more than income for the year, may be due to set off of loss in the year.

With carry forward it can be set off only against income from house property and not any other head of income.

Sanjay S (Chartered Accountant) (1375 Points)
Replied 04 February 2017

I agree with above opinions. I also add:

I. Deduction for Interest on Home-Loan u/s 24(b):

Self-occupied Property - Maximum deduction = Rs. 2,00,000

Let-out property or Rented House - maximum Deduction - NO LIMIT

In your case, current year loss under head House property can be set off against other heads and the balance loss, if any shall be carried forward. However, in subsequent years, such carried forward losses can be set-off only against the respective heads.

II. You had also mentioned:

"For example, Directors draws handsome amt of remuneration frm company. If it can be set off against any income head than introduction of this section have no use."

Only current year losses under Head House Property is allowed to be set-off under any head. Once it is carried forward to subsequent years, then set-off is allowed only against respective heads. If you come to think of it, all these provisions are meaningful when put together.

III. Anyway, Nobody can benefit from these sections forever. The loan will eventually be repaid and the interest payments will stop and finally the residual carried forward losses shall lapse in some future year. The benefit ends there.

(Guest)

yes this is a disappoiting change...
actually in case of self occupied property payment of interest used to create loss which can be adjusted against salary head and employees were able to reduce taxable income.

now we can set off only 2lacs against salary or any other head and balance will be carried forward

CA. Roopali Kadam (Jobs on assignment basis.) (1453 Points)
Replied 04 February 2017

Originally posted by : Dhirajlal Rambhia
	"I assume that they have curtail maximum deduction upto Rs. 2 lac only and rest amt will be carry forwarded as per IT Act." True, but in case of self occupied property. For rented property there is no limit.

EXTRACT FROM BUDGET SPEECH

In order to address the existing anomaly of interest deduction in respect of

let out property vis-à-vis self-occupied property, it is proposed to restrict

set off of loss from house property against income under any other head

during the current year up to Rs two lakhs. The loss not so set off would be

allowed to be carried forward for set off against house property income

for eight assessment years.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 04 February 2017

Yes, Thanks CA Avneesh Shukla & Roopali Kadam for updation.

Amendment to be effective for both SOP and also LOP, from next financial year, if Finance Bill gets approved as per the suggestions.

Rajesh Kumar Gupta (Senior Divisional Manager) (714 Points)
Replied 04 February 2017

the budget proposes to restrict loss under house property let out to 2 lacs as against no limit at present.

Swaroop George (5 Points)
Replied 05 February 2017

How about when on owns two houses, one self-occuipied and other rented. ?? Will he eligible for 2 + 2 = 4Lakhs ?. Budget talks about putting a cap on rented property only..

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 06 February 2017

Rightly said by Mr. Rajesh Kumar Gupta, the cap is over net loss from the Income from House Property to be setoff against any other income head

Restriction on set-off of loss from House property
Section 71 of the Act relates to set-off of loss from one head against income from another.

It is proposed to insert sub-section (3A) in the said section to provide that set-off of loss under the head “Income from house property” against any other head of income shall be restricted to two lakh rupees for any assessment year. However, the unabsorbed loss shall be allowed to be carried forward for set-off in subsequent years in accordance with the existing provisions of the Act.