Deduction under section 24(b) on account of interest on borrowed capital

Finance Act 2017 has imposed a restriction over the HP loss being limited to Rs. 2L only, hence you can not claim more than 2L even if utilising 24(b) on let out property you are eligible to claim more than 2L. However, you may try using 80EE, if you satisfy the conditions stipulated therein. Or else the excess unclaimed can be carried forward and set off eventually.

Yes, you are correct........... the interest over let-out property is fully deductible against its rental income, and that was the ONLY  rule till last assessment year...

But that is not the only rule applicable this year in your case....

You are trying to adjust loss of house property against other income (salary or IFOS, here).....there section 71 comes in action.......

For your reference attached as bellow:..........

IT sec. 71 sub sec 3A [Inserted by the Finance Act, 2017, w.e.f. 1-4-2018] .  .... ... .  "[(3A) Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect of any assessment year, the net result of the computation under the head "Income from house property" is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to set off such loss, to the extent the amount of the loss exceeds two lakh rupees, against income under the other head.]"   ........ ........ 

More over, if you wish to carry forward the loss to next year..... ITR1 is not applicable to you......

Thank you for the replies.

Lets exlude the "carry forward" scenario for now.

In previous years, ITR1 allowed "income from house property" to go below 2L in case the property is "let-out". It did NOT allow it in case the property is "self-occupied".

This year, ITR1 does NOT allow "income from house property" to go below 2L in any case, whether it is "let-out" or "self-occupied".

There are two issues:
1) The income tax portal does say that in case of let-out property the quanum of interest has no limit (please see "https://www.incometaxindia.gov.in/tutorials/12. income-from-house-property.pdf". On page 7, it clearly says that "In case of a let-out property, there is no limit on the quantum of interest which can be claimed asd eduction under section 24(b)". It also mentions "[As amended by Finance Act, 2018]" on each page which means its latest status)
2) The ITR1 should remove the option of selecting "let-out" or "self-occupied". Because it makes no difference.

The rule is correct, its interpretation is correct........ but it only speaks of sec 24(b)..........

Now your loss from letout HP is 3.3 lakhs, and is correct as per section 24(b), which the section do not deny at all........

But when you fill the data in the ITR utility for AY 2018-19, it has to consider other rules simultaneously.......

As the section 71 of IT act, which is applicable  from 1.4.2018, now utility cannot consider more than Rs. 2 lakhs as adjustment of loss from HP with any other heads of income............. that is so simple to understand ........