Housing Loan Interest u/s 80EEA

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Ravindranath A

SWO

35 Points Posted on 16 October 2024

A Housing loan sanctioned in 2020 and the stamp duty value of the property is Rs 42 lakhs. The Interest on Housing loan came to Rs. 3.80 lakhs in a year. After availing interest exemption in current year under section 80EEA upto Rs. 3.50 lakhs, can the balance of Housing loan interest of Rs. 30,000 can be set-off with Capital Gains in the current year.

Now I need clarification for the following:

1) If the balance can be set-off in the current year with Capital Gains, under which head it can be set-off, i.e.,

a) STCG other than equity,

b) STCG on equity,

c) LTCG on house property,

d) LTCG other than equity,

e) LTCG on equity.

2) If the set-off is not allowed in the current year, can it be carried forward to next year?

3) Is there any limit for set-off of interest.

Replies (2)

Quick Summary

This discussion explores whether the remaining housing loan interest, after claiming the deduction under Section 80EEA, can be set off against capital gains. It also seeks clarification on the specific head of income it could be set off against, whether it can be carried forward to the next financial year, and if there are any limits to this set-off. The content provides details on the conditions for claiming the 80EEA deduction and the order of claiming deductions under Section 24(b) and 80EEA.

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 16 October 2024

1. Yes, if the set-off is not allowed in the current year, it can be carried forward to next year. 2. As per Section 79 of the Income-tax Act, 1961, the set-off of losses can be carried forward to future years, subject to certain conditions. 3. Regarding the limit for set-off of interest: - As per Section 78 of the Income-tax Act, 1961, there is no specific limit for set-off of interest. However, it's important to note that: - The set-off of interest is allowed only against income from the same head of income (e.g., interest income can be set off against other interest income). - The set-off of losses is subject to certain limits and conditions, such as: a. Business loss can be set off against business income, and b. Unabsorbed depreciation can be set off against any income (except salary).

Aashok Kumar Sharma

Finance/Compliance Consultant

75780 Points Posted on 07 November 2026

80EEA conditions:

• Additional deduction of up to Rs 1.5 lakh on home loan interest (over and above Sec 24(b) Rs 2 lakh), if:

– the loan was sanctioned by a financial institution between 1 April 2019 and 31 March 2022

– the stamp duty value of the house is up to Rs 45 lakh

– the individual doesn't own any other residential house on the date of sanction

– the individual isn't eligible for Sec 80EE.

• Your loan (sanctioned 2020, SDV Rs 42 lakh) qualifies if you didn't own another house on sanction.

• The deduction continues until the loan is repaid (no sunset on claiming, only on sanction). Old regime only.

• Claim 24(b) first (up to Rs 2 lakh for self-occupied), then the balance interest under 80EEA (max Rs 1.5 lakh). Don't double-claim the same interest.