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CA Intermediate · Taxation · Set-Off or Carry Forward and Set-off of Losses

Kavita, a resident individual who has opted out of the concessional tax regime for tax year 2026-27, has salary income of ₹8,00,000, interest on fixed deposits of ₹50,000 and a loss of ₹3,50,000 from a let-out house property (computed). She has no other income or brought-forward losses. What is her gross total income and the house property loss carried forward?

Gross total income is ₹6,50,000 and ₹1,50,000 of the house property loss is carried forward. Inter-head set-off of a house property loss is capped at ₹2,00,000 in a year, so only that amount reduces salary and interest income, and the remainder goes forward.

  1. AGTI ₹6,50,000; loss carried forward ₹1,50,000Correct
  2. BGTI ₹5,00,000; loss carried forward nil
  3. CGTI ₹8,50,000; loss carried forward ₹3,50,000
  4. DGTI ₹6,50,000; loss carried forward nil

Explanation

Set-off of house property loss against income under other heads is limited to ₹2,00,000 in a tax year. GTI = ₹8,00,000 + ₹50,000 − ₹2,00,000 = ₹6,50,000. The unabsorbed loss ₹3,50,000 − ₹2,00,000 = ₹1,50,000 is carried forward for up to eight tax years. Allowing the full ₹3,50,000 set-off gives ₹5,00,000, which ignores the cap.

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