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Deduction under via

CA Vap Patel (Practice) (1205 Points)

01 February 2016

I have received money from PPF of Rs 3,50,000/- which is exempt u/s 10. I have STCG on sale of share of Rs 11Lac. I have paid Rs 1,00,000/- as interest on house property. Now i want to know whether I can claim this 1 lac deduction against STCG? Though chapter VI deduction is not available against STCG earned u/s 111A, but I can say that i have paid house loan interest from exempt income that i have received from PPF and there is nothing mention in the act regarding denial of deduction under VIA if it is made from exempt income.

Your views are required as soon as possible.

Thanks & Regards

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5 Replies

Shivani Mittal (Practice) (425 Points)
Replied 01 February 2016

Hi Vap,

Interest on House Property Loan is claimed u/s 234(b). Hence, income u/h house property is to be computed considering the nature of property i.e vacant/let out/ self occupied. Accordingly, if it comes out to be a loss u/h house property, such loss can be set off with STCG u/s 71(1)

Regards

CA Shivani Mittal

CA Vap Patel (Practice) (1205 Points)
Replied 01 February 2016

Ohh I m sorry. Instead of principal I used word interest. So my question is whether I will get 100000 deduction for home loan principal that I have paid?

Shivani Mittal (Practice) (425 Points)
Replied 01 February 2016

Ok, i'l just clarify my understading:

STCG u/s 111A - Rs. 11 lacs & Deduction under chapter VI-A (Housing loan repayment) - Rs 1 lakh

Accordingly,

Deduction under chapter VI-A of Rs. 1 lakh cannot be adjusted with STCG u/s 111A as per Sec 111A(2). But excess of threshold limit over other income can be adjusted with STCG u/s 111A as per proviso to Sec 111A(1). Which means in case you don't have any other income, the threshold limit of Rs. 2,50,000/- can be adjusted to STCG u/s 111A which means Total Income will be Rs 8.5 lakhs (Rs 11 lacs - 2.5 lacs).

Regards

CA Shivani Mittal