Page 30 - Banking Finance February 2018

ARTICLE

Y If any one of the above three conditions is not Y From AY 2018-19, section 71(3A) has been inserted,
fulfilled, interest deduction for self occupied house which states that set off of loss from house property
will be restricted to only Rs 30000 instead of Rs will be restricted to Rs 2 lacs only. However, the
2.00 lacs. unabsorbed loss can be carried forward for eight
Y Interest of pre construction period is also assessment years and can be set off against gains
deductible in five years starting from the year when under house property head in future years.
the construction/ possession is complete. In case of Y If interest burden is much above Rs 2.00 lacs, it is
self occupied house, total deduction will not be in the interest of the assessee to let out the house
more than Rs 2.00 lacs. instead of self occupying it. In some cases, people
Y Deduction is available on accrual basis and not on have opted to live in a rented house and let out
payment basis. their own flat to maximize deduction under section
24(b). In some cases, two owners rented out their
Y There is no limit of Rs 2.00 lacs per annum, if house
is actually let out. It means any amount accrued flats to each other to avail this benefit. This action
is well within the limits of law and does not attract
as interest is deductible.
any penalty or legal action.
Y This deduction is available only from the year when
the possession of the house is received or Disclaimer:
construction is completed.
Above tips are only illustrative and indicative. One must
Y On calculation of income from house property, the resort to actual income tax laws/rules before acting upon
net income may be in gain or loss. In case of self- any advice given in this article. A tip may not be universally
occupied house, the loss can never be more than good for everyone. It may be working for one person but
Rs 2 lacs and it can be set off with incomes of other may be detrimental for another.
heads like salary etc. In case of let out property,
loss can be any amount, which till AY 2017-18 could Above tips may and may not be sustainable in future
be set off with incomes of other heads. depending on the changing rules of Income Tax.

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