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CA Intermediate · Taxation · Income from House Property

Sunita owns two self-occupied houses in Jaipur and Indore, neither let out nor used for any business. She wants both treated as self-occupied for tax year 2026-27. Interest on loan for the Jaipur house is Rs 1,60,000 and for the Indore house is Rs 90,000. Assuming she opts under the Act for both to be treated as self-occupied and the loans were taken for acquisition after the specified date, what is her total income from house property?

Her income from house property is a loss of Rs 2,00,000. Both self-occupied houses have nil annual value, and the total interest deduction on self-occupied property is capped at Rs 2,00,000 even though actual interest is Rs 2,50,000.

  1. ALoss of Rs 2,50,000
  2. BLoss of Rs 2,00,000Correct
  3. CLoss of Rs 1,60,000
  4. DLoss of Rs 90,000

Explanation

Annual value of both self-occupied houses is nil. Interest deduction for self-occupied property is capped at Rs 2,00,000 in total across such houses. Total interest is 2,50,000, so the allowed amount is 2,00,000, giving a loss of Rs 2,00,000.

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