The rules for setting off house property losses under the new tax regime:

Unlike the old tax regime, where house property losses could be set off against income from other heads up to ₹2 lakhs, the new regime does not permit this set-off. Instead, losses from house property can only be carried forward for 8 years and adjusted against income from house property.

Here are examples to illustrate the rules for setting off house property losses under the new tax regime:

Example 1: Loss from House Property
Mr. Kumar has a salary income of ₹12 lakhs and a loss from house property of ₹3 lakhs. Under the new tax regime, he cannot set off the house property loss against his salary income. Instead, the ₹3 lakhs loss is carried forward for 8 years to be adjusted against future income from house property.

Example 2: Multiple Sources of Income
Ms. Sharma has a salary income of ₹15 lakhs, interest income of ₹2 lakhs, and a loss from house property of ₹4 lakhs. Under the new tax regime, she cannot set off the house property loss against her salary income or interest income. The ₹4 lakhs loss is carried forward for 8 years to be adjusted against future income from house property.

Example 3: Carry Forward of Loss
Mr. Jain has a loss from house property of ₹5 lakhs in the current year. He has no other income from house property to adjust this loss. Under the new tax regime, he can carry forward the ₹5 lakhs loss for 8 years. If he earns ₹3 lakhs from house property in the next year, he can adjust ₹3 lakhs of the carried-forward loss against this income, leaving ₹2 lakhs of the loss to be carried forward for the remaining 7 years.

This change in rules may impact taxpayers who have been relying on setting off house property losses against other income. It’s essential for taxpayers to reassess their tax strategy and consider the implications of the new tax regime on their overall tax liability.