Date from which amendment is applicabl e– W.e.f. 1st April, 2018 and will apply in relation to evaluation year 2018-19 and subsequent years
Material in this Short Article.
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As per Budget 2017
Constraint on set-off of loss from House residential or commercial property Section 71 of the Act relates to set-off of loss from one head versus income from another. In line with the international best practices it is proposed to insert sub-section (3A) in the said area to offer that set-off of loss under the head “Income from home property” against any other head of earnings shall be restricted to two lakh rupees for any assessment year.
This modification will take effect from 1st April, 2018 and will, appropriately apply in relation to evaluation year 2018-19 and subsequent years.
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Constraint on set-off of loss from House residential or commercial property: Section 71( 3A)
Comprehensive Practical Illustration and Effect of this Modification
Allocation of Principal and Interest is provided in the below table:– this is done based on EMI calculator– ONLY INTEREST ASPECT MATTERS FOR
CONVERSATION– PL NOTE INTEREST COMPUTATION IS NOT RELEVANT– the below table exists for total analysis so that you can understand that just how much interest would be paid over 15 years
| Year | Principal | Interest | Total Payment in Each Yr. | Principal Outst. |
| 2017 | 2,76,737 | 9,05,327 | 11,82,064 | 97,23,262 |
| 2018 | 3,32,151 | 9,57,377 | 12,89,528 | 93,91,112 |
| 2019 | 3,66,930 | 9,22,597 | 12,89,527 | 90,24,181 |
| 2024 | 4,05,352 | 8,84,175 | 12,89,527 | 86,18,829 |
| 2024 | 4,47,798 | 8,41,728 | 12,89,526 | 81,71,030 |
| 2024 | 4,94,689 | 7,94,837 | 12,89,526 | 76,76,341 |
| 2023 | 5,46,488 | 7,43,037 | 12,89,525 | 71,29,852 |
| 2024 | 6,03,713 | 6,85,812 | 12,89,525 | 6,526,138 |
| 2025 | 6,66,930 | 6,22,594 | 12,89,524 | 58,59,208 |
| 2026 | 7,36,767 | 5,52,760 | 12,89,527 | 51,22,441 |
| 2027 | 8,13,917 | 4,75,611 | 12,89,528 | 43,08,525 |
| 2028 | 8,99,143 | 3,90,382 | 12,89,525 | 34,09,382 |
| 2029 | 9,93,296 | 2,96,230 | 12,89,526 | 24,16,086 |
| 2030 | 1,097,307 | 1,92,221 | 12,89,528 | 13,18,780 |
| 2031 | 12,12,211 | 77,319 | 12,89,530 | 1,06,571 |
| 2032 | 1,06,571 | 888 | 1,07,459 | 0 |
- Municipal taxes are presumed
- Lease is presumed to be INR 40,00 0 p.m. 12 = INR 4,80,00 0 p.a.
- It is presumed to be increasing @ 5% every year.
- Analysis of continue and Set-off of loss in income from Home in different years
Note 1: Loss of FY 2024 and partial loss of FY 2024 is set-off
| Year | Loss |
| FY 2024 | 3,02,213 |
| FY 2024 | 75,079 |
| Overall loss set-off in FY 2028 | 377,292 |
Keep In Mind 2: Balance loss of 2024, Full loss of 2024, 2023 and 2024 is set-off
| Year | Loss |
| FY 2024 | 165,239 |
| FY 2024 | 173,006 |
| FY 2023 | 99,765 |
| FY 2024 | 20,026 |
| Total loss set-off in FY 2029 | 4,58,036 |
Conclusion– Based on specific truths, it is possible that in some cases loss from house property might be ended without set-off in subsequent years.
This change might have lengthen and deep impact particularly on take home income of employed class individual considering that income more than 50% would draw in surcharge @ 10% and at the same time, loss of house property is restricted to INR 2,00,00 0
The effect talked about in above analysis will change with change in interest rate.
You might Download Finance Expense 2017 From Below link …
Financing Expense 2017, Direct tax Changes in Budget plan 2017– Download
Other Spending Plan 2017 Updates
- Cash Costs Limit Reduced from Rs 20000 to Rs 10000 u/s 40 A( 3 )
- Base year Altered for calculation of capital gains from 1981 to 2001
- Modified Charge for Delayed Filing of Income Tax Return– Budget Plan 2017
- Disallowance of depreciation u/s 32 & capital investment u/s 35 ADVERTISEMENT on money payment
- TDS Rates U/s 194 J Decreased from 10% to 2% by Financing Bill 2017
- Deemed profit u/s 44 AD reduced from 8% to 6% for digital transaction
- Earnings Tax Due Dates
- How to submit Response for Outstanding Tax Demand
- Extra Devaluation– Who can Avail?, availability, Rate of Include Dep
- Tax Audit Limitation U/s 44 AB Increased From 1 Crore to 2 Crore AY 2017-18
- Threshold limit Increased for upkeep of books of accounts
- Penalty on CA & professionals for furnishing incorrect information in statutory report
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