Interest component of home loan for one let out house comes to around Rs. 3.50 lakhs. I receive a monthly rent of ₹15,000 p.m. I stay in a rented house. Under the circumstances can I claim loss from the house let out by me as deduction against my salary income?
For computing taxable income, you are allowed to claim a standard deduction of 30% of the rent received by you. In addition to the standard deduction, you are also allowed to claim deduction in respect of interest paid on money borrowed for buying, constructing, renovating and repairing the house. In case the house is self-occupied, you are allowed to claim maximum of two lakh deduction for maximum of two self-house property taken together.
However, in case the is let out you can claim deduction for full interest paid on the money so borrowed but the loss under the head “ can be set off against other income during the same financial year up to Rs. 2 lakhs and any unabsorbed loss over 2 lakhs has to be carried forward for set off against house property income in next eight years.
