If the property is let out (LO)/deemed to be let out

(DLO), the entire rent or notional rent is taxable under Section 23 of the Act. Amongst other deductions from house property, the full interest payment is allowed from the same as deduction.

"If on account of the above, the net result of computation of income is a loss (i.e. if there is only SOP or the rent/ notional rent is lower than the interest payment etc.) such loss was allowed to be set off fully from income of taxpayers from any other source of income (e.g. salary, other sources etc.). Hence, such set off of loss generated on account of mainly deduction under Section 24 of the Act was fully allowed," Sirwalla said.

Despite the disincentive for buying of house by this particular provision, housing finance companies are expecting rise in credit offtake.

Credit off-take towards affordable segment of housing will augment supply especially for both stake holders the first home buyer and developer who will now have access to cheaper funding, DHFL Chairman and Managing Director Kapil Wadhawan said.

The government's focus on affordable housing will definitely help making the term more acceptable to developers, who are now not only entering this segment with confidence but also talking about it openly. There is now considerable goodwill attached to such a move, and affordable housing obviously makes very distinguished business sense, he said.

(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)