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CS Executive · Tax Laws and Practice · Income under the Head House Property

Mr. Shah has a loss of Rs. 3,00,000 under Income from house property in a tax year, and has no other income. Under section 110 of the Income-tax Act, 2025, what happens to the loss that cannot be set off against other heads?

The unabsorbed loss is carried forward for a maximum of eight succeeding tax years and can be set off only against income from house property. Section 110 of the Income-tax Act, 2025 restricts both the heads available and the carry-forward period.

  1. AIt is carried forward for up to eight succeeding tax years and set off only against house property incomeCorrect
  2. BIt is carried forward for up to four succeeding tax years against any head of income
  3. CIt is carried forward indefinitely against house property income
  4. DIt lapses because house property losses cannot be carried forward

Explanation

Section 110(1) lets the unabsorbed loss be carried forward and set off only against income from house property of the following years. Section 110(2) caps the period at eight tax years immediately succeeding the year of the loss. Hence the other options misstate the period or the heads.

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