Insertion of new section 71B

Insertion of new section 71B

Section 71B: Carry forward and set-off of loss from house property.

Where for any assessment year the net result of computation under the head "Income from house property" is a loss to the assessee and such loss cannot be or is not wholly set off against income from any other head of income in accordance with the provisions of section 71B, so much of the loss as has not been so set-off or where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year and—

  (i) be set-off against the income from house property assessable for that assessment year; and

 (ii)  the loss, if any, which has not been set off wholly, the amount of loss not so set off shall be carried forward to the following assessment year, not being more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.

     This amendment will take effect from 1st April, 2018 and will, accordingly apply in relation to assessment year 2018-19 and subsequent years.

Let's do it with example how to calculate and carry forward loss from house property from AY 2018-19???




Example :

The following information is given by Mr. Taimur Khan for the Assessment Year 2018-19 are as follows :

Particular	Income in Rs.	Expenditure Incurred to earn income in Rs.
		Municipal Tax	Interest on borrowed capital	Other Expenses
Salary	50,00,000	-	-	4000
Bank Interest	4,00,000	-	-	Nil
Property 1 (Let Out)	11,46,000	1,000	2,05,000	-
Property 2(Self-occupied)	Nil	4,000	3,65,000	-
Property 3 (Let out)	1,00,000	2,000	7,00,000	-

Determine the amount of net income for the assessment year 2018-19. He is eligible for deduction of Rs.1,30,000 under section 80C.

-> Solution :

1st we calculate the income from house property :

Particular	Property 1	Property 2	Property 3
Gross Annual Value	11,46,000	Nil	1,00,000
Less : Municipal Tax	1,000	Nil	2,000
Net Annual Value	11,45,000	Nil	98,000
Less : Standard deduction	3,43,500	Nil	29,400
Less : Interest on borrowed capital (In the case of self-occupied property, it cannot exceed Rs.2,00,000)	2,05,000	2,00,000	7,00,000
Income from Property (Total : (-) Rs.2,34,900)	5,96,500	(-)2,00,000	(-)6,31,400

Computation of net income _

Particular	Rs.
Salary	50,00,000
Bank Interest	4,00,000
Total	54,00,000
Less : House property loss(House property loss is Rs.2,34,900,amount Deductible is limited to Rs.2,00,000)	(2,00,000)
Gross Total Income	52,00,000
Deduction u/s 80C	(1,30,000)
Net Income	50,70,000

                                                                                                           

Note : Unadjusted house property loss of Rs.34,900 will be carry forward for next 8 assessment years.