Can capital gains from sale of unlisted stocks be adjusted against loss from house property?

I bought a house in 2012 and sold it in 2017 at a loss of Rs 11 lakh. I have been carrying forward this loss in my IT returns every year. This year in February, I sold some unlisted stocks, which were acquired between 2015 and 2017 and made capital gains of Rs 3 lakh. Can these capital gains from sale of stocks be set off against capital loss from house property?

Divakar Vijayasarathy, Founder and Managing Partner, DVS Advisors LLP replies: As per the provisions of the Income Tax Act, the brought forward loss from house property can be set off only against income from house property in the subsequent years. Thus, in the given scenario, the house property loss of Rs 11 lakh for the year 2017 can be set-off only against income from house property, until the year 2025 as the maximum time period allowed to set-off the brought forward house property loss is only eight years. Hence, the capital gains arising on sale of unlisted shares shall not be offset against the brought forward house property loss and the long term capital gains of Rs 3 lakh shall be charged to tax at the rate of 20% + surcharge + cess after providing the benefit of indexation.

I have been paying interest on a home loan since June 2016. Construction of the flat was completed in 2018 but possession was taken only in 2020. Can I take tax benefit u/s 24b for interest paid on home loan? Principal amount payment started in 2020.


Raj Lakhotia, Managing and Founder, Partner, LABH & Associates replies: As per explanation to Sec 24(b) of the Income Tax Act, 1961, if a property has been acquired with borrowed capital, the interest payable on such capital borrowed for the period prior to the previous year in which the property has been acquired, minus any deduction, shall be deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years. In the present case the assessee can claim the pre-construction interest paid on home loan in five equal instalments.