The Hindu Business Line : House property deductions

I HAVE let out a house for rent, and earn a rental income of Rs 28,000 per annum. This year I have incurred an expenditure of Rs 95,000 in carrying out certain essential structural repairs in the roof and walls required for building's safety. Can this expenditure be claimed as a deduction in computing income from house property? To incur this expenditure, I sold shares at a loss amounting to around Rs 80,000. Can this be claimed as a deduction in computing my income?

T.K. Das

Reply

In computing income from house property, deduction under Section 24 can be claimed against the annual value of the property. The deductions available under this Section are:

30 per cent of the annual value.

Interest on capital borrowed for purchase, construction, repairs, renewals or reconstruction of the house property.

There is no question of claiming any further deduction in respect of repairs etc. The reader, therefore, cannot claim the expenditure of Rs 95,000 as a deduction. If, however, the expenditure is of such nature as to improve the asset, the same can be treated, as cost of improvement and the benefit of reducing the same will be available in computing capital gains if, and when, the house is transferred. From the facts stated by the reader, it appears that a capital loss has been incurred on the sale of shares.

The loss under the head can be set off or carried forward and set off as follows:

The loss arising from the transfer of a short term capital asset may be setoff against income arising from the transfer of either a short term capital asset or a long term capital asset and the balance if any be carried forward and set off against the income arising from the transfer of either a long term capital asset or short term capital asset within eight assessment years immediately succeeding the assessment year in which the loss was first computed.

The loss arising from the transfer of a long term capital asset may be set off only against income arising from the transfer of a long term capital asset and the balance if any be carried forward and set off against income arising from the transfer of a long term capital asset within eight assessment years immediately succeeding the assessment year in which the loss was first computed.

It will not be possible to adjust this capital loss against the house property income or any other income other than under the head capital gains of the reader.

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