Loss Under the Head “House Property”
Introduction
Loss under the head “Income from House Property” arises when:
- Self-Occupied Property: The interest on housing loans exceeds the annual value (nil for self-occupied).
- Let-Out Property: The aggregate of interest on housing loans and municipal taxes exceeds the rental income.
Losses can be set off against other incomes in the same year or carried forward for adjustment in subsequent years.
Set-Off and Carry Forward Rules
- Intra-Head Adjustment:
o Loss from one house property can be set off against income from another house property.
o Exception: If the assessee has opted for the concessional tax regime under Section 115BAC, loss from self-occupied property cannot be set off.
- Inter-Head Adjustment:
o Loss under “House Property” can be set off against income from other heads within the same year, subject to exceptions:
Maximum loss of Rs. 2 lakh can be set off; the remainder is carried forward.
No set-off is allowed against:
Undisclosed income (Section 79A).
Income from gambling (Section 115BB).
Unexplained income (Section 115BBE).
Income from transfer of VDAs (Section 115BBH).
Specified income of trusts/institutions (Section 115BBI).
Winnings from online games (Section 115BBJ).
Assessee opting for the concessional tax regime under Section 115BAC cannot set-off house property loss against income under any other head.
- Carry Forward of Losses:
o Unabsorbed house property loss can be carried forward for 8 assessment years.
o Carried-forward losses can only be set off against “Income from House Property” in subsequent years.
Additional Points
- Late Filing of Returns: Loss under “House Property” can be carried forward even if the return of income is filed after the due date.
- Time Limits for Set-Off:
o Intra-Head: Adjusted in the same year.
o Inter-Head: Adjusted in the same year against eligible income.
o Carry Forward: Set-off within 8 years.