New Delhi, Jan. 4 -- With housing loan interest rates remaining reasonable over the years, many taxpayers have turned to loans to fund their residential property purchases.

Tax laws, however, limit the deduction of housing loan interest for self-occupied properties to Rs.2 lakh annually. For rented properties, the entire interest is deductible against rental income. This raises the question: is the interest paid in excess of Rs.2 lakh a complete loss for taxpayers, or can it be claimed against taxable income in another way?

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Several tribunal decisions have taken the view that such excess interest, which could not be claimed as a deduction und...