Carry forward and set off of loss from house property
[Section-110 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 110(1) of Income Tax Act 2025
110(1) The unabsorbed loss from house property for any tax year shall be carried forward to the subsequent tax year, and shall be set off only against income from house property, if any, computed for such subsequent tax year, and so on.
Section 110(2) of Income Tax Act 2025
110(2) The unabsorbed loss from house property referred to in sub-section (1) shall be carried forward to the following tax year, not being more than eight tax years immediately succeeding the tax year in which such loss was first computed.
Section 110(3) of Income Tax Act 2025
110(3) In this section, “unabsorbed loss from house property” means, loss computed under the head “Income from house property” for the tax year, which has not been, or is not wholly, set off against income from any other head, under section 107, for the said tax year.
FAQs on Section 110 of Income Tax Act 2025
What is meant by ‘unabsorbed loss from house property’ under section 110(3)?
“Unabsorbed loss from house property” refers to the loss computed under the head “Income from house property” for a tax year that has not been, or is not wholly, set off against income from any other head under section 107 for the same tax year.
Can loss from house property be carried forward?
Yes, loss from house property that could not be set off in the current tax year can be carried forward to subsequent tax years.
Under which section of the Income Tax Act, 2025 is the carry forward of house property loss governed?
It is governed by Section 110 of the Income Tax Act, 2025.
How many years can the unabsorbed house property loss be carried forward?
Such loss can be carried forward for up to eight tax years immediately following the tax year in which the loss was first computed.
Can house property loss be set off against any other head of income in future years?
No, in future tax years, the carried forward house property loss can only be set off against income from house property.
Is there any time limit for carrying forward unabsorbed house property loss?
Yes, the time limit is eight tax years from the year in which the loss was initially computed.
Can current year house property loss be set off against other heads of income?
Yes, as per section 107, such loss may be set off in the current year against other heads. However, any portion that remains unabsorbed must follow the rules of section 110.
If I have no income from house property in future years, can I still set off the loss?
No, the carried forward loss can be set off only against income from house property. If there is no such income, it cannot be set off.
Is partial set-off of house property loss allowed in future years?
Yes, if there is insufficient income from house property in a given year, the loss can be partially set off and the balance carried forward further, subject to the eight-year limit.
What happens if the loss is not set off within the allowed eight years?
The unabsorbed portion of the loss lapses and cannot be set off beyond eight tax years.
Do I need to file the return of income to carry forward the loss from house property?
This FAQ depends on procedural rules which are outside the scope of section 110. Refer to relevant procedural provisions of the Act or seek professional guidance.
Can carried forward house property loss be set off against salary or business income in future years?
No, such set-off is restricted only to income from house property in future years.
Does the eight-year limit start from the year the loss was incurred or the year it was first carried forward?
It starts from the tax year in which the loss was first computed, not when it was first carried forward.
Is there any restriction on the number of properties from which the loss originates?
Section 110 does not impose any restriction on the number of properties. It deals with the aggregate loss computed under the head “Income from house property.”
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