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CMA Intermediate · Direct and Indirect Taxation · Income from House Property

For a tax year, Kavita has a loss of Rs. 1,80,000 under the head 'Income from house property' that cannot be wholly set off against other heads. Under section 110 of the Income-tax Act, 2025, how may the unabsorbed loss be dealt with?

The unabsorbed loss is carried forward and set off only against income from house property, for at most eight tax years immediately succeeding the year in which the loss was first computed. It cannot be set off against other heads.

  1. ACarried forward for up to four succeeding tax years and set off against any head of income
  2. BCarried forward for up to eight succeeding tax years and set off only against income from house propertyCorrect
  3. CCarried forward indefinitely and set off only against income from house property
  4. DNot carried forward and lapses at the end of the tax year

Explanation

Section 110 allows the unabsorbed loss to be carried forward to the following tax year and set off only against income from house property. It cannot be carried forward beyond eight tax years immediately succeeding the year in which it was first computed. So carry-forward is limited in time and in the head against which it can be set off.

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