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CS Executive · Tax Laws and Practice · Income under the Head House Property

Arjun owns two self-occupied houses in Delhi, both with nil annual value. House A has interest of Rs. 1,60,000 on a loan taken to acquire it, and the construction was completed within five years of the loan year with the lender's certificate furnished. House B has interest of Rs. 90,000 on a similar qualifying loan. Ignoring other income, what is the loss under the head house property for the tax year under the Income-tax Act, 2025?

The loss is Rs. 2,00,000. Both houses have nil annual value, and each qualifies for interest deduction within its own limit, totalling Rs. 2,50,000. However, the aggregate deduction for self-occupied houses cannot exceed Rs. 2,00,000, so the loss from house property is restricted to that amount.

  1. ARs. 2,50,000
  2. BRs. 2,00,000Correct
  3. CRs. 3,00,000
  4. DRs. 60,000

Explanation

Each house has nil annual value, so there is no 30% deduction. The interest deduction on each qualifying house is capped at Rs. 2,00,000 under section 22(2)(a), so A gets Rs. 1,60,000 and B gets Rs. 90,000, a total of Rs. 2,50,000. Section 22(5) caps the aggregate for such houses at Rs. 2,00,000, so the loss is Rs. 2,00,000. Rs. 2,50,000 ignores the aggregate cap.

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