House property loss setoff

could we set off house property loss first against long term capital gain then other income. for e.g in

house property loss Rs. 150000 Long term capital gain Rs. 340000 and other sources income  210000 , deduction under 80c lic investment 150000. then what will be total income

if we hp loss first adjusted against capital gain then 340000-150000 +210000-150000. then no tax

if first against other saurces then 210000-150000-150000 and party  have  paid tax on capital gain @ 20%

which is correct method...