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CA Intermediate · Taxation · Income from House Property

Mr. Dev Malhotra owns one self-occupied house in Delhi, used as his residence throughout tax year 2026-27. He took a loan to buy it and paid interest of Rs 2,60,000 for the year. He has no other house property. Assuming the deduction for self-occupied property interest applies and he has no other income from house property, what is the income or loss from house property that can be set off against other heads for this tax year?

The loss from house property is Rs 2,00,000. A self-occupied house has nil annual value, and interest on borrowed capital is deductible only up to the Rs 2,00,000 limit, so the excess Rs 60,000 of interest is disallowed.

  1. ALoss of Rs 2,60,000
  2. BLoss of Rs 2,00,000Correct
  3. CLoss of Rs 30,000
  4. DNil

Explanation

For a self-occupied house the annual value is nil. Interest deduction is capped at Rs 2,00,000, so the loss is Rs 2,00,000. The excess Rs 60,000 is not allowed.

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