Should the loss incurred be excluded (ring-fenced) for the calculation of your tax liability?

After declaring my rental income and expenses on the ITR12, I'm presented with this question after specifying the source code (which I assume is 2533). Which should I choose and what is the effect of the two answers?

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TaxTim TaxTim says:
3 July 2013 at 21:56

The ring-fencing applies if you wish to use the loss from rental income against future profits or if you wish to have the loss set off against your income for this year from other activities.

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