Loss on house properrty

	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.

Agree with Sir

Yes adjustment with other heads is allowed.

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.

"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.

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. 

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.

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.

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.

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..

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.

• This amendment will take effect from 1st April, 2018 and will, accordingly apply in relation to assessment year 2018-19 and subsequent years.

Does this mean on set off 4 Lakhs, if he has a self-occuipied and rented house ?