I have 2 house properties both let out, where there is income in one property and loss in another, …
I have 2 house properties both let out, where there is income in one property and loss in another, the net effect being loss. How do I compute my total income?
Section 70 of the Income Tax Act allows a person to set off any losses from the house property from the income of any other house property.
Section 71 of the I-T Act allows setting off the losses from house property from the other heads of the Income but not from the casual income i.e. any income which is not likely to occur again in the year. (Speculative PGBP)
The unadjusted losses are allowed to be carried forward for a maximum of 8 years starting from the year subsequent to the year in which loss has occurred. In the subsequent years, the set-off is allowed only from the head 'Income from House Property'.
The amount of losses that can be set-off on the house property from other income heads is restricted to Rs 2 lakh either house is a self-occupied or let out property.
