Housing Loan Interest u/s 80EEA

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 (1)

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).

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