DelhiDesk The article discusses the tax implications for a person who owns a let-out house and receives a monthly rent of Rs. 15,000. The person can claim a standard deduction of 30% of the rent received and also claim a deduction for the interest paid on the money borrowed for buying, constructing, renovating, and repairing the house. If the property is let out, the person can claim a deduction for the full interest paid on the borrowed money, but the loss under the head “Income from house property” can be set off against other income during the same financial year up to Rs. 2 lakhs. Any unabsorbed loss over 2 lakhs has to be carried forward for set off against house property income in the next eight years. The article advises the person about the tax implications of owning a let-out house and receiving rental income.
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👉 Interest component of home loan for one let out house comes to around Rs. 3.50 lakhs.
👉 Monthly rent received is Rs. 15,000 p.m.
👉 Can claim loss from the house let out as deduction against salary income.
👉 Standard deduction of 30% of rent received allowed for computing taxable income.
👉 Deduction for interest paid on money borrowed for buying, constructing, renovating and repairing the house allowed.
👉 Loss under the head “Income from house property” can be set off against other income during the same financial year up to Rs. 2 lakhs.
👉 Any unabsorbed loss over 2 lakhs has to be carried forward for set off against house property income in next eight years.
👉 After adjusting interest, loss under the head “Income from house property” comes to Rs. 2.24 lakhs.
👉 Maximum of only two lakh of loss can be set off against other income including salary income.
👉 Balance unabsorbed loss will have to be carried forward for next eight years and can only be set off against positive income under the house property head.
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