Section 110 — Carry forward and set off of loss from house property. Successor to s.71B of the 1961 Act.
Section 110 is in Chapter VII — Set Off or Carry Forward and Set Off of Losses, which runs from section 108 to section 121.
Sub-section (1) applies where a loss computed under the head "Income from house property" cannot be wholly set off against income under any other head as permitted by section 109. So much of the loss as is not set off is carried forward to the following tax year and, under clause (a), set off only against income from house property assessable for that year; clause (b) carries any remaining balance forward again.
Sub-section (2) provides that no loss shall be carried forward under this section for more than eight tax years immediately succeeding the tax year for which the loss was first computed.
Section 109 lets a house property loss reduce income of other heads in the year it arises; this section deals with the remainder and confines it. Once the loss leaves its own year it loses its cross-head reach, so an old property loss cannot be held back and used against unrelated income later. The eight-year limit puts an outer boundary on how long an unused loss survives.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Maximum carry forward period | Eight tax years | Counted as the tax years immediately succeeding the tax year for which the loss was first computed | Sub-section (2) |
The carried forward loss is narrower than the original: in its own year it can go against other heads under section 109, but from the following year only against income from house property, so an assessee who sells the property or stops letting has nothing left to absorb it. The eight years run from the tax year for which the loss was first computed, not from the year it is first carried forward.
An individual computes a house property loss of Rs. 6 lakh and sets off Rs. 2 lakh against other heads that year under section 109. The unabsorbed Rs. 4 lakh is carried forward. Next year the house property income is Rs. 1.5 lakh, which absorbs that much and no more — the balance cannot touch salary or business income. The remaining Rs. 2.5 lakh carries forward, but not beyond the eighth tax year immediately succeeding the year for which the Rs. 6 lakh was first computed.
You meet this section in the carry forward and set off schedule of the return, and in an intimation or assessment order restricting a claimed set off to house property income or refusing a loss that has run past eight years.
be set off only against the income from house property, if any, assessable for that tax year
No loss shall be carried forward under this section for more than eight tax years immediately succeeding the tax year for which the loss was first computed.
See the full 1961 to 2025 concordance.