Many middle class investors in India, especially those from the IT sector, are buying houses. Then there are many who are buying their second homes.
Returns from real estate as an investment avenue is only second to equity. And to make it more simpler, you have home loans to assist you in buying your loved property.
Today we will check on what are the income tax benefits on a second home loan in India. Income tax benefits of second home ownership is often confusing and I hope this article will clarify on the basics.
The basics first
Before we go ahead, it might make sense to understand how things operate when you have a single home loan.
First, understand what annual value of house property is and how it is calculated. Note that this figure measures the amount for which your home might be expected to be let out each year. Also note that the annual value of the house which you occupy is nil (zero).
Once you understand this term, you can then figure out how income from house property is calculated.
To recap the formula, it is :
Income from house property = Rental Income net of taxes (Annual Value ) – Standard deduction of 30% – Interest paid on home loan
If the house is let out, you will get rent and as you can see from the above formula, you will have to calculate the rent received and pay tax on it.
For a single home loan that you might have, the principal is allowed as deduction up-to a limit of Rs 1 lakh and interest up-to a limit of Rs 1.5 lakh.
What happens if you have 2 home loans ?
The income tax benefits of second home ownership in India are favoring the investor. Here are the specifics.
One home will need to be considered to be let out while the other needs to be considered to be self occupied. You can pick any of the houses for such a purpose. It does not matter whether the let out property was fetching rent or not or was lying vacant – the government asks you to pay income tax on it even if you got no rent.
That’s a let down ? Not really – check out the deduction on home loan interest for the second property.
# Full interest on home loan is allowed as deduction for the let out property – so there is no limit of Rs 1.5 lakh as was the case in a self occupied property.
# As far as principal is concerned, for all the properties one has, the total deduction is subject to Rs 1 lakh.
Example
Suppose a person has two houses with the below details. He is paying interest of Rs 80,000 and Rs 125,000 on them during one financial year. The annual value of the houses has been arrived at already and shown below.
Now the question is, which house should the investor self occupy and which one should he let out to avail of maximum income tax benefits. Note that the principal component of tax savings has not been considered here as even if the home loan principal contribution does not add up to Rs 1 lakh, the other Section 80C deductions more than make up for it. So the interest component of the home loan is only considered here.
House 1 is self occupied
In this case, the NAV of house 1 is zero as it is self occupied so the standard deduction is also not applicable. The income from house property comes to Rs -80,000 and Rs -8,100 for both the houses. So the total interest deduction is Rs – 88,000.
House 2 is self occupied
When house 2 is self occupied, the figures change a bit. The income from house property in the self occupied house in this case is Rs – 125,000.
The total interest deduction is Rs -111,200 which is better than when house 1 was self occupied. So to maximize the interest deduction, house 1 should be put on rent and house 2 should be self occupied.
What are your thoughts on the tax benefits on a second home loan ?
Sir…if i sale my first house after clearing home loan and then buy a residential plot out of sale amount and then i take home loan for construction….what will be taxation on this second home loan. here i have only 2nd house ..first house have been sold….give your comments on income tax on long term capital gain from sale of first house and what about home loan for 2nd house
Capital gain arising on sale of residential land is exempt if asset is long term and you have purchased another house within 1 year BEFORE or 2 years AFTER sale date OR you have constructed a house within 3 years after the sale date.
So you are good as long as your construct within 3 years.
The home loan for second house will be treated as the only home loan you have and you will get maximum Rs 1.5 lakh interest deduction and Rs 1 lakh principal deduction.
Good explanation, use of charts makes it easier to understand. Why would one want to go for a second home loan, as if the burden of the first home loan was too much.
What if a person works in a city A and stays in rent and buys two apartments in city B and city C on home loans. What would be the tax effect?
There are many people who have lots of money to buy residential houses. And even second ones.
I think even in this case for tax computation purpose one house will be treated as self occupied and another as let out.But the person must be claiming HRA….
So, I can claim HRA on rented house in city A, while I can claim tax benefits on both my properties in city B, considering one of them as self occupied while the other one as rented out?
Good one. short and precise.
I would request you to include the following scenario and explain the same way as it is explained in the article.
Scenario: I already have a house on which I individually have taken the home loan. Now, I buy a second home and my wife is a co-owner and co-borrower, how the above equation changes in terms of tax liabilities and benefits. How can I and my spouse save tax ?
Thanks.
Which is the house you are living in – first or second ?
The first one as the 2nd one is under-construction
So yo ustill have to treat one house as rented out according to the calculation above.
Now, the income tax benefit for principal/interest is on the % contribution that you both do. Since yor wife is a co-borrower for 2nd house only, she gets tax benefit for this house to the extenmt of her contribution. She does not get any benefit for the first house.
You get for both. If you consider the second hosue let out, unlimited interest can be used for deduction as explained in the article.
Get hold of a atx consultant to do the calcualtions.
you have two houses are there..your wife is not benefit of the first house….you are also beneficent of this house…in this case wife and husband are also be same …..you do not have any deduction……
The TAX benefit on second home loan favors rich investors and they keep on buying many and not only two. Rent out and get tax benefit.
People buying first home find it difficult and many also can’t buy it on time. Rich becomes more richer and get benefits, this is also a small factor which keeps realty price high.
Example is good and shows which one is better to self occupy and save more.
Still, I would say stay in the home where you like and feel to have good life as after all we are doing all savings/investments for good life only :).
Yeah agreed Chirag – thanks for your thoughts.
Sir , My question is
I have completed my 1st home loan & have taken another home loan for 20L.
The home is located in Bangalore. Currently I stay in Hyderbad & staying in rented house. My parents stay in Home 1 & my wife / kids in Home 2.
My question is
1) Can I claim HRA in Hyderabad
2) Should I calculate a 30% value on home for tax purpose
3) can I claim 1L (80c) & 1.5 Interst??
Thanks
Vivek
Vivek – read https://www.thewealthwisher.com/2010/09/01/income-tax-it-deduction-of-house-rent-allowance-hra/
See the last statement – “If you own a home and have a home loan on it, you can still avail of the HRA benefits along with the home loan tax benefits. It does not matter where your house is located, both the home loan income tax benefits and the house rent allowance benefits can be availed simultaneously. If your home is in the same city as you are rented in, you can justify why you have chosen to stay on rent and still claim the HRA exemption.”
I Have house in Surat. This is let out and home loan is completed. I plan to buy second home at Mumbai with new home loan and plan to stay in it. Queries:
1) Can I take advantage of the above explanation. i.e. Showing 1st let out and second as self occupied. In this case, Complete Interest amount (on 2nd home) – ((Rental Income on 1st-30% standard deduction+Taxes).
2) Is it possible to claim HRA if I wish to let out second one and choose to stay on rented one.
For HRA read – https://www.thewealthwisher.com/2010/09/01/income-tax-it-deduction-of-house-rent-allowance-hra/
If I understand your query correctly, Yes you can take advantage of the above explanation. Consult a tax person also to ensure he does the calcualtions for you.
Quite a healthy discussion, seems like lot of people are interested in second home. If its for an investment purpose, over a long period of time, say 15-20 years real estate has returned about 6-8% returns but in short-time you can expect over 50% too and in prime areas even 100%.
In the long term, it is more than 10% for real estate.
This is pretty interesting article. I wasn’t aware of the tax implications of second house at all. This was really surprising for me “the government asks you to pay income tax on it even if you got no rent.” How could they do that? Shouldn’t it be “no income no tax”?
Also, can you please help me understand how are these values calculated? The rental income, interest payable etc.
Vivek, the government expects us to buy one house for ourselves – if a person buys more it means the second house in on rent !If a person has a second house and is not on rent, it means he is buying for investment purposes.
See the income tax benefit also – it is HUGE !!!
I personally think the current policy is suitable.
The calculation of the values are explained in the other two articles which are hyperlinks – annual value of house property and income from house property. Let me know whether this helps.
Ok. If the second house is not on rent, does a person get to chose which one to declare for self-occupied and which one on rent? Or ideally person has to declare as per the possession?
There could be a possibility that person is residing in both, e.g. one is close to office for weekdays and another for weekend, which is a little far away.
Yes you can decide which one to show on rent – that is written in the article as well.
Sir,
My First house is in Delhi and is vacant
My Second house is in Bangalore where I am residing.
So to get the maximun tax benefit can I declare My first house as self-occupied and second house as let-out?
You need to do calculations to arrive at that. Wherever you get max income tax benefit, you need to go with that.
Sir, a very well written article. Pls accept my compliments. Could you pls advice me on the following. I have 2 flats: No1 flat was taken posession of in 2007 and regd jointly with my wife.Loan is taken jointly.Status of this flat is self occupied. Till last FY my wife was not working so I was claiming 100% benefit on int as well as principal component.In FY 11-12, she has begun to work and contributing towards EMI Can she take benefit of int and principal component in the ratio in which she is contributing from this AY onwards?
Ques no 2: Posession of my second flat was taken on 30 Mar 2012. Since I am showing the first flat as self occupied, the 2nd one will be deemed to be genr income as per IT rules.My ques is that since I have taken posession only on 30 Mar : what is the deemed income that i should show? Will the flat be deemed to have genr income for only one day or will it deemed to have genr income for the entire year despite my having had posession of it for only one day in that year?
On query 2 – I am sure it does not have income for the entire year but it will be better to check with a tax consultant please.
On Query 1 – Yes, she can.
The article beautifully explains most of the tax aspects involved in second property. Could you please advise on the following:
I had purchased my first home in 2004 jointly with my wife. Loan was taken from bank in joint names and income tax benefit is being availed by both of us in the ratio of ownership.
We have recently booked another house with a builder. We have not yet got the possession. For the second house my wife had obtained staff loan (she is a banker) for Rs.12 lakhs in her name. For balance amount we had taken commercial loan in joint names. My queries are:
1. Since the house is owned jointly, can I avail the benefit of interest repayment on the 1st bank loan which is in my wife’s name only. If not, then can I get the benefit for the entire amount of the 2nd loan which is in joint names.
2. Though the interest is accruing against the loan amount (both staff loan as well as commercial loan) but I have not yet paid any interest or principal (there is no pre-EMI) to the bank. Can I then get the benefit of deduction of interest accrued but not paid.
3 If tax benefit is available on the accrued interest, can it be adjusted against income from salary or other sources, or it has to be carried forward as loss from house property.
Rajesh, tax benefits needs to be availed in proportion of ownership in house, not who took how much loan !
For queries 2,3 , please get in touch with a tax consultant.
How important it is to get the possession of the second house within 3 years of availing the second home loan? Are the tax benefits on interest on second home loan linked to that i.e. 3 years time frame, as this time line is in the hands of developer and not the house owner. Kindly clarify this point.
Very informative & enlightening article! Thanx a lot for the posting. I’ve two queries I would like your views on.
Query 1: I bought a home in 2004, took home loan for financing it and repaid it completely over the years (after taking tax benefits on the first home loan, which are no longer applicable). So I’ve no home loan outstanding as of today. I reside in that house. Now, I plan to buy a second home, take home loan for it and let it out. Will I get second home tax benefits (unlimited tax exemption on the interest component net of muncipal taxes and notional rent income) even when my first home loan is fully paid and closed ? Based on the details provided in your article I think I should, but still wanted to double check with an expert ?
Query 2: What are the provisions in DTC (Direct Tax Code) with respect to second home loan tax exemptions and notional rent clause ? I read 30% standard deduction will become 20% and notional rent will be abolished ? Any other changes I missed out ? I know DTC is not yet implemented but if that’s the direction we are heading to, we should make second home loan decision based on new tax rules expected to take effect in future.
Thanx in advance…
Yes you would. Don’t worry on DTC till it comes around.
Hi , I’m not sure but someone pointed out that the befits is given to housing Loan and not Houses, so can you please put some more light on this.
regards
prashant
Sorry what is your question ?
Hi, i am planning to take another Home loan, as understood from above discussion i can take full deduction of Interest and Principle upto 1 lac. but i have three queries
1)like to know if i did not take income tax benefit and i dont pay income tax on notional rental income, is it allowed?
2) i am buying second home in joint name of myself and my wife, if i rent my home, can i show full rental income in my wife name even if i am only paying home loan?
3) what is your advice for booking home – in which sequence, should i keep my name first or my wife’s name first? (wife is housewife)which can help me to avail max tax benefit
I have a multi-floor single house, where I am residing in one floor and other floors have been given for rental. So, Can It be considered as both Self-occupied and let-out property.
I have total 3 different home loans on the same house, like, construction, renovation, and Extension. Total about 4 Lakhs interest paid towards these 3 loans on the same house.
I am getting rental amount of Rs. 60000/- per annum from other floor.
So, can I declare the interest amount 1.5 Lakhs under self-occupied and other remaining 2.5 lakhs on let-out property? How can I declare the total interest 4Lakhs for exemption including the income from rental?
@Laxman,
Very interesting query, 3 different home loans for the same house.
I guess a tax consultant would be in a better position to assist you.
In other words,
If I have a home loan on a house, which is multi floored. I am residing in one floor, and other floor have given for rent.
If I am paying about 3Lakhs towards home loan interest, can I declare 1.5 lakhs under self occupied and remaining under let-out property, by declaring the rental income also?
i am also having two home loans on the same house. how can i get the tax benefit of the two loans.
Hi… as mentioned one of the house will be considered let-out property. Go through the illustration above to understand the tax treatment.
I have two houses – one in Delhi and One in Hyderabad. both these are on rent and I have taken housing load against both of them. What I understand is that one of them I can declare as self occupied as a result annual value or rental income will be zero where as against this I can claim the whole of interest paid loss on house property
@Sanjeev,
Your understanding is correct, i think its well explained in the example above.
Sir,
i would just like clarification on the meaning of ‘second home loan’.Does it mean a ‘home loan for the second home’ or does it mean a ‘second loan taken for buying a second home’?
Help will be highly appreciated.
Thank You
@Jay,
It meant home loan for the second home.
Hi,
I found this entire blog very interesting and enlightening. There has been quite a few question for which I’m trying to find some answer, I would appreciate any help from you.
1. I would like to purchase two flat on home loan, each would cost 50 L, both will be jointly with my brother. The EMI share would be for one flat (A) 100% EMI will be borne by myself, for the other one (B) 33% by self and remaining by my brother. In this case will the 2nd home concept be applicable, if Yes request you to elaborate please.
2. In case there is an opportunity in future to close one of the loan, will it be beneficial to close 100% or some portion should be maintained.
3. If I sell one of my existing property (7 yrs old-no loan) which is in the name of my Parents (both are senior citizen) and use the fund to make partial payment of the loan, will that earning be considered for wealth tax.
Thanking you
Sibaji
@sibaji,
1. Yes it will be available.
2. Better to close off 100% loan.
3. Since its the income earned by your parents you can always take a loan from them and use it to make payment for your home loan.
A tax consultant would be in a better position to advise you.
Appreciate your help, thank you.
Sir,
I have taken a home loan to purchase a house in Vijayawada in 2007 which was let out and recently I purchased a house in Hyderabad taking a second home loan and currently residing in it. I would like to know whether I can get tax benefit on interest part together for both the home loans i.e. Net annual value on vijayawada house + 1,50,000 on the second loan if I show Hyderabad house as self occupied
@Srinivas,
I think you can, it is explained in the article above when House 2 is self occupied.
I have a flat for which EMI is complete in the year 2011-12. Now, I have booked another flat in the year 2011-12, which is under construction (not yet got the possession) and I have started paying EMI against the HBL . Interest amount for the first year(2011-12) is nearly Rs.4 lacs (for the 2nd Flat). Can I claim Interest dedcution for both the HBL ie., for the 1st one which is Rs.5000 (2011-12) and the 2nd one which is Rs.4 lacs(2011-12) ? Pls. explain.
Thanks for such an informative article on buying a second home. Read the articles of other people also, however I have some doubts and need your help.
I had purchased my first flat in 2004 by availing a bank loan of 6.0 lakhs. Out of which about 1.5 lakh is outstanding. I was showing the principal and interest in my IT returns and availing the tax exemption.
Now I have booked my second flat with my wife as co-owner for 43 lakhs for which construction is on. I will be availing 20 lakhs loan for it through bank.
I have also given my 1st Flat on rent in the month of March 2012 for Rs.14,000/- rent and presently staying with my parents in their flat.
My Queries are as follows:
1. Is it advisable to right off the 1st Loan?
2. Can I and my wife avail tax exemption for the 2nd Flat in terms of Interest and principal repayment and show the same in my IT returns? What would be the ratio?
1. Need to do more quantitative analysis.
2. Yeah, in the ratio of ownership in the house which generally is 50% between husband and wife.
I have 3 houses
1. 1st home purchased in 2004 , given on rent – home loan @7.45%
2. 2nd home under construction , will get possesion by mid next year. is the biggest of the lot. Planning to sift there. – home loan @ 10.60%
3. 3 rd home purchased 3 months back, under construction , will get possesion by next year – home loan @ 11.25
how can i avail benefit of 2nd home loan to get maxixmum tax benefit, please advise
You need to calculate yourself, this involves numbers !!!!
Also your data is inadequate to get to any conclusion.
Ok . Thanks a lot.
Can you please solve one query…
I am planning to shift to the second home, and let out 1st and 3 rd house, but for tax savings , can I show 1st house as self occupied and 2 nd and 3 rd house on rent?
Dear Sir,
Hat’s of you for awesome service.
I have gone through the posting but none of them similar to my doubt.
I have home loan for self occupied property in Bangalore, this is eligible for Tax benefits.
2nd home loan I have taken as composite loan and purchased (June 2011) plot in same city Bangalore and yet to be constructed as I have 2 years time for construction. This is not a site/land loan (plot loan), if only land loan I don’t need to construct the house, until I clear the loan. Now in this case am I eligible to claim the total interest for tax benefit? This is not generating any income.
Could you please guide me on the same? Ton thanks
Don’t quite understand your question. What is the second loan for login?
Sir, I was working until August 2011 after which I have quit. We own a property that has been rented out and which has a home loan running. Until now, both myself and my husband were claiming the tax benefits for home loan. Since I have quit and that too in the middle of the financial year, what should we do while filing the returns to get maximum tax benefit?
1. Rent income claimed by me, home loan tax benefit claimed by husband.
2. Rent income claimed by husband, home loan tax benefit claimed by husband.
3. Rent income and home loan tax benefit jointly claimed.
P.S I may be paying a meager tax since I worked only part of the year and so do not really need the home loan benefit.
Kindly check with a tax consultant
I have two adjoining flats in a co operative housing society
can these two adjoining flats be clubbed as a single unit .
Please note I have two seperate loan accounts for the two flats
Clubbed for what purpose ?
Dear Sir
Clubbed for Income tax purposes
For Flat 1 – B1701 – Home loan is closed
For Flat 2 – B1702 – Home loan is still in vogue.
If the two adjoining flats can be clubbed for tax purposes I will save as follows :
If they are different for one house Ihave to consider DEEMED Rent , where as if they are clubbed , there is no deemed rent . Since there is no loss due to Housing Loan interest for one flat if I do not have to show deemed loan for the same, then I save some tax
I don’t think they can be clubbed.
after setoff the business loss from rental income of a patnership co. the tax on profit is 2lac. is there is any option to save the tax.
Very useful and well written article 🙂 It helped me understand how to effectively plan for my second house. Thank you very much and keep up the good work.
Thanks Varsha, keep coming back !
Hi,
Can you please tell me as to how is the rent of a property decided. If I claim that I am renting it out for 5,000 whereas the actual maybe 10,000 then how would the same be verified?
Also if the 2nd house is under construction then I am ideally not occupying the property whereas I maybe still paying the EMIs – can I declare the same in the income tax and avail unlimited interest rate benefits?
If it is Rs 10,000, you have to show Rs 10,000 and not Rs 5,000. The law can come back to you sometime later in life so better avoid these things.
The interest benefit can only be taken after completion of the house construction. The interest paid in EMIs can be claimed over a period of 5 years.
Hi Wealthwisher,
Thanks for the regular updates on Second home Loan.
My house facts:
A. 1st House – under construction – possession expected by Dec 2012. – This would become self occupied then…plannng to shift there.
B. 2nd house – under construction – possession in 2014.
C. currently paying rent. – will stop once I move into the 1st house.
Query:
1. Once I have assumed the first house as SO, can I change it to Deemed let out in the later years for tax purposes basis the calculation?
2. Will the second house become deemeed to be let out even while under construction?
3. Can I avail the tax benefit on the interest payment on the second house even while it is under construction or would have to wait till possession? If I would have to wait till the possession, can I claim the entire pre construction interest against the notional rental income in that year?
3. If after possesion of the second house, I assume that the 2nd house is SO and the first house is rented, can the pre construction interest on the first house be availed in total against the rent?
Hope I have been able to make you understand my queries.
Thanks
Rachin.
1. yes.
2. no
3. after possession. yes, over next 5 years.
4. nope
Hi,
I purchased my 1st plat in 2009 and i am claiming tax benefit for it on the home loan.
Now i got my 2nd flat in joint with my brother. so now there are 2 home loans on my name.
1 is on my indivisual name and other in joint with my brother.
I am leaving in my 1st flat. 2nd flat is vacant.
Which is the best way to claim maximum tax benefit so that both me and my brother will get the good tax benefit?
home loan 1: 2238000
home loan 2: 2130000
You need to calculate this friend.
Hi,
I have following query. I have one home in Mumbai no housing loan on it and purchased second home on housing loan in Pune. in both the flat my wife is co-owner. Presently pune flat is not let on rent.
(1) Should I declare pune flat as 2nd home in pune.
(2) Should I claim complete housing loan intrest for tax saving .
(3) if I rent this and leave and license agreement made by wife name – should I get any benefits.
(4) Please advise how to get maxiumu tax benefits from housing loan .
Thanks
Ajay Jain
@Ajay,
My views –
1. Yes
2. Yes you should but since its co-owned by wife both you and your wife can claim 50% tax benefits.
3. The agreement will have to be made on both the names.
4. If both of you are working then you can claim maximum tax benefits on home loan.
congrats for a writing a very interesting note.
A person has two flats in city A, both have Home Loan and both fetch rental income and person lives in City B (company provided accommodation).
Are we saying that rental income (net of deduction) from only one rented flat will be taken as part of the persons taxable income and the rental income from second flat will not be taxed at all?
The article does not sat that Atul, please have a look again. Rental income is zero if you stay in the house, not if it is rented out !
Very useful information. I am sure lot of people are unaware of this facility for going for second home loan. Thanks a lot. I have two questions.
1) The entire interest part for the 2nd home loan is allowed income tax deduction and not the principal part of the 2nd home loan. If someone is having existent loan for the 1st home can he get dedudtion on the principal paid amount for the 1st home loan?
2) If I keep my wife as co owner of my second home although I am the 100% borrower of the entire loan amount can I get the full ineterest benefit ?
1) Full interest on home loan is allowed as deduction for the let out property – so there is no limit of Rs 1.5 lakh as was the case in a self occupied property. As far as principal is concerned, for all the properties one has, the total deduction is subject to Rs 1 lakh.
2) If your wife is co-owner, the housing loan is considered in the same proportion as ownership. Check on this though.
Sorry, the second question needs to be clarified more –
My wife is not working. In that case if I keep my wife as co owner of the 2nd home although I am the 100% borrower of the home loan can I claim the entire interest part as income tax deduction as my wife does not require any income tax deduction as she is not working?
I am in the same boat. My wife is not working. Can i claim 100% tax exemption on principal and interest when my wife is a co-applicant and co-owner ?
Yes you can.
As per your example shown above shown as HOUSE 2 as self occupied ,please clarify me the following.
1.The income from the second property is shown as Rs 125000. suppose If my Income from the second property is above 1.5lakh (i.e suppose 3 lakh/annum). can i claim the income above 1.5 lakh?.
yeah.
Hi , I have a flat and i had cleared my housing loan onit in the year 2010 , now i’m going for another flat and will rent it out, in this case will i be getting full interest exemept or only 1.5lacs as this is only HL i had.
Can you please clarify
1.5 only as this is the only home loan you have, the first one is closed !
So you mean it doesn’t matter whether you are having another own house and rented this one, you still get 1.5lacs, thats very pathetic, it is very illogical.
I have two homes. Loan for first home is fully paid. and now paying home loan for second home. Can I get full tax benefit for second home?
i.e. 1 Lakh Principle amount under section 80 C
and 1.5 Lakh for interest on Loan?
Please advise.
What is the income tax caluse for this deduction? Is it section 24 only same as interest deduction for 1st home loan?
I got a flat and 3 residential plots. I am now planning to sell 2 lands which are 3years old. whether I have to pay income tax on the gains on the sale of the lands.
YEAH, you have to !
Hi,
I have a home loan for a flat in Pune. I work and stay in Hyd. Currently I am claiming HRA and home loan. Now I plan to buy a home in Hyd, so this will be my second home loan. But the home is far away from my office., so I plan to stay rented near my office. Please suggest if I can claim both my home loans and HRA as well ?
Ah, this I do not know. Check with a tax consultant and let us know here.
Sir, this is regarding the term “second house”.
I own a 2BHK flat (loan completed in 2010) and last year I purchased a piece of land (plot) by taking SBI Realty Home loan. Since the plot is rather far from my workplace, I am yet to build house in the plot. However, I have built a 6-7 feet boundary wall on all sides of the plot, a main gate and inside there is a 10ft by 12 ft tin roof room along with a bathroom. This was for the care taker to live there to avoid unwanted circumstances since i heard of people forcefully occupying/capturing others land in that area. Also, this room will serve as a store room while constructing the house. I am talking to Municipal tax people to get this room assessed for house tax etc.
My query is- given the circumstances can this be treated as a second home for tax rebate purposes ?
regards
Prem
I dont think so as this is not a house yet. But I recommend you check with a tax consultant.
Hi, My husband owns a flat in CHennai and we want to rent that. Do I (Wife) show that as her income and not my husband income. He bought and got registered in his name and my name is not included in any registration document.
Thanks,
Sweta
Should be husband’s income.
I,rishi goel own a commercial property with my mom & bro & bro wife.As i pay the Emi through my saving account i want to know that can i avail the full income tax benefit on interest .
My home loan got closed in September 2012 and I am planning to go for a second home loan – can I still avail the benefit of 2nd home loan interest rate or will it be 1.5 lacs even if I get it before the FY closure.
If you have one home loan closed and another new one taken, then practically you have only 1 home loan now. Did I get your question correct ?
Yes, Thanks I got to know that since only 1 loan is there it’s not possible to get the Interest Benefit.
Can I get a home renovation loan and then use the 2nd loan to claim the Interests?
My father is having a plot in his name. Is there any way where I can avail a home loan and show the tax benefit ?
Does power of attroney work in this case or registering in my name is the only option left ?
Got to register. Do check with a tax consultant also.
Currently I am staying in a rented house in Bangalore. I am planning to buy a house in my home town Lucknow (with a Bank Loan).
1. How much tax benefit I can show on the interest portion ? Is it 1.5 lac or unlimited ?
2. Do I need to add the rent in my income or it will be my first house and hence no income ?
Both answers are provided in the articles and in comments so I kindly request you to read through in detail.
I have an exisitng home loan. I plan to go for a second house and opt for 2nd home loan. I have informed the same to my HR department. They are not clear about this benefit and can only provide me the exemption on the insterest and pricipal part for the 1st home loan only as per HR policy. Kindly suggest in this condition how can I claim the benefits?
Which company is this ? I am surprised they are not aware !
If they decide not to incorporate this, then you can claim it offline when you file your IT returns.
I am living in Pune in rented apartment and have a house in another city of maharastra on bank loan.Presently i am availing benefit of HRA & Home Loan (principle & Interest) for tax assessment.Now in current year i have purchased another House in pune on bank Loan and it is still under construction. Also from last six months i am paying EMI to bank. In this case, Is am I eligible to show second home loan (principle & interest amount) for tax benefit?
Not yet as the house is under construction. But remember to mention this in your ITR form when you file the tax returns.
Sir, I think you explain all scenarios very interestingly.
I am a govt. employee and my husband is working in an MNC. We have bought 2 homes through home loans. For one home we can’t take benefit of tax saving on the home loan interest because we have not taken possession of that home so far. Other home is in Mayur Vihar on which we can take benefit of tax saving of home loan on principal as well as on interest. Please suggest can we take benefit of tax savings from both the houses? If yes how?
Not yet, not till possession. When possession of the 2nd house happens, then please use the interest component of the house under construction over 5 years to take benefit. Your scenario is explained in the article as well.
I own a house which is being used to keep my old furniture as I reside in my husband’s house. Both the houses are in the same locality. Now, what should be the treatment of the house owned by me w.r.t. taxability. I assume that I can show that as self occupied as this is the single house in my name.
I don’t think so. It cannot be self occupied as you are staying with your husband. You need to show it as rented out – do check with your tax consultant as well please. But why are you not renting it out with the furniture 🙂
Sir
I have taken home loans Rs. 75 Lacs whe property value was 1.5 crore from icici bank b4 2 years and now property cost is 3 crore,
now i want to sell one floor, can i do it and what is the process to sell.
One floor ? You have a building ? Get yourself a tax consultant as you will have to pay short term capital gains if you sell within 3 years.
Thank you for the wonderful article. Here is my situation.
1- Self occupied apartment. Home loan at 12%. Outstanding principal balance is Rs 8 Lakhs. I am the sole owner of this
2- Second home which is rented out. No loans on this property. Rental income is Rs 5 Lakhs per annum.
3- I am planning to purchase an independent house within the same city by taking a second home loan of about 70 Lakhs at 12% interest rate. This will be owned by me and my wife (House wife)
Here are my questions
– Can I show my new house (point 3) as self occupied (lets say I purchased it already) while filing taxes, even though I will continue to stay in first house
– Can the Rental income on house 3 be declared as my Wife’s income, where as I get income tax benefits for home loan
– Can house 2 be gifted to my wife, so that I do not add rental income to my salary. Technically I can sell it to my wife, but I want to save registration costs which run into lakhs of rupees.
Your inputs will be appreciated.
What documents needs to be submitted as proofs for second home (let out property) property?
I guess they will be home loan documents (if the house is on loan) and rental agreement on the minimum for sure.
I have recently purchased a second house. I am paying 10 months of EMI left for my first house ( co-owned by my wife). can i show the new house a my residing house and start claiming the tax benefit.
Also if once all the EMI are over (for both house) will i have to show the income from second property at that time also…
Your queries are answered in the article and in the comments from readers, please go through it in detail.
Can Drawing & Disbursing Officer give benefit of interest & principle on Home Loan while computing the Income Tax of the employee who has more than one house property? If so how to compute? 1. If one house is self occupied & other is vacant.
2. if one is self occupied & other is on rent.
3. One Home loan is completely repaid & Home loan of second home return through EMI is in process.
4. Home loan of both the homes return through EMIs is in process.
i have a home loan going on and will be over in a year. I am planning to buy a new house on loan. Once my old house EMI are over. Can show this new house loan as second home loan and get tax benefit and show the first house ( whoz EMI are over as residing house.)
Yes you can.
I have recently bought a second house. Till now I was getting a tax benfit from my employer directly for the principal and interest part of the 1st home loan (Deduction for my taxable income) . Now, I have informed my employer about the above mentioned benefit and asked them to give the benefit directly ( i.e. deduction of the entire intersest component paid against the 2nd home loan) from my salary. However, employer is stating that they are not aware of this benefit, so I have to claim this when I am filing my tax return. Kindly advice.
What is your employer’s name – it is true that if they cannot then you can always file it offline later and claim the benefits.
Hi,
I need your help for the tax planning.
I have three houses.
1. Loan taken -17L, 7 years left.rented for 25k p.m. Annual int. paid -80k
2.loan taken -62L, under construction, expexted rent 30k p.m. Annual int. paid – 483k
3.loan taken -43L, under contruction, expected rent 12 p.m. Annual int. paid – 492k
House no. 2 is the biggest , so planning to shift there.
Can i show house 1 as self occupied and 2 and three as rented?
If yes then i will not have rent agreement for house 2?
What are the documental proofs i need to sybmit to my hr dept.
Please help. I am throughly confused.
Sanjay – you are in undated with property my friend 🙂
A tax consultant will need to do some calculations for you and advise which one to show as occupied.
You will need rent agreement – it is always wise to have one as the person staying there might need it to claim HRA. The HR dept will need it for sure.
I have two houses , one at my native where my mother stays and the other at my work place where i would stay. at 1st house the rent value is 36000/ and interest paid is 75000/ per annum. I don’t get rent but those are the values. for 2nd one rental value us 1.2 lakhs and interest paid is 3.0 lakhs. now, which one should i show as let out and are there any documents i need to submit to prove that it is let out? as my mother is staying in one,i don’t get rent from any of the flats..
To do the calculations, you need to take services of a tax consultant. You will need to show one house as rented out, which one depends on where you get the tax benefits most.
I have one property in Jamnagar under my name (freehold property) and have recently invested in second under construction property in joint name with my wife. Pocession for the under construction property will be completed after 48 months and have taken loan from HDFC. Can you tell me income tax benefit that i can avail in my return for this new under construction property?
Can you give details of the Jamnagar property – house / flat; on loan ?
I have two home loan running. i have not rented my second home. what is the value of rent i need to declare.
do i need to show my employer some documents to get the benefit. and if the employer does not accept this , i can claim it in during filing my return.
Thanks
Lalit
You need to go to a tax consultant who will guide you on that. If your employer does not entertain you, you can claim it during filing you returns – but what claim are you referring to here ?
Hi,
i was talking about interest on home loan benefit for second home loan.
Thanks
Lalit
i have purchased a second house on loan. what if i don’t want any tax benefit from it, still will i need to show rental income from it.
Thanks
Shweta C.
Why don’t you want to claim tax benefit – you still need to show the rental income.
I have first house rented in bangalore and iam in NCR so i am able to avail interest+HRA (NCR)as tax benefit. If i plan to take second house in bangalore, will i be able to avail benefit for second house which interest both the house +HRA (rented house in NCR). In other word is it necessary that out of 2 houses one of them needs to be self occupied?..
My first house in NCR needs a comparitively small loan, while a second one in the city of current residence needs a huge loan. I would be puttng the NCR house on rent, while i will be staying at the new house with the larger loan. Since the higher tax benefit is on the rented apartment, it would have been great if i could show my new residence as a rental and the one in NCR as self-occupied…but this seems wierd and am sure gvt wont allow this reversal of reality. Please can you confirm.
I have a similar situation… My flat at home town has smaller loan and smaller rent amount. Current residence at work location has higher loan and higher rental potential (but self occupied). Tax-wise it would be great if I could declare the reverse, but is it acceptable to the govt? I too thought it would be wierd to show that I am living in home town but working here. Moreover, can I then claim HRA separately at work location here since I am deemed not living here in my own house? How can I benefit the most in this situation?
we have booked a flat (second house) jointly in my name and wife’s name by availing housing loan from SBI Rs. 25.00 lakhs. The project is in construction stage. We are servicing only the interest portion w.e.f August 2012. My wife is already having a housing loan for the first house which is self-occupied. Please clarify as to how we should claim IT exemption in our names separately for the 2nd house which is still under construction….
My Employer did not take my second home into consideration. Now i have to claim the Income Tax benefit for second home during filling my IT return. If i need to claim Tax benefit on second home, do i need to produce some documents and calculations to IT dept. Where should i submit them ?
File your returns through a CA/tax consultant and provide him all the documents.
If I have only one house and let out a part of it, will there be upper cap of 150000 towards the deductions under house load interest? I am happy to declare the income from rent.
Can my employer give the benefit of 2nd home loan directly?
I am working in Dewas. I have one house at dewas M.P which i have already completed the loan and i am purchased another house at Udupi (Karnataka) with 20 lacs loan. Can i get the tax benefit.
I have one flat where I am residing without any loan in gurgaon. I have bought secound flat in another city likely to be delivered to me in November 13 for which I have taken loan of Rs 14.9 lakhs in 2007 and am paying EMIs since then having principle and interest component each year . so far no claim is shown untill flat is taken over, even after taking over it will take 3-4 months to comleate the woodwork. How do i plan my tax rebate and also the premiums paid ever since. Grateful for suggestions————js aulakh
I have two houses on my name .
– One house is in Kharghar and I m the sole onwer of that house. My loan on that house is cleared. After loan clearance do i need to show this house in my IT returns.
– Second house is in Mira Raod which is in joint name with my Husband. For which I m paying EMI and showing the same in IT return as a Self occupied house.
Can I show the second house as self occupied and not showing the first house in IT returns,
I have two houses .fisrt house is in the name of my wife . i am the joint owner . she is paying interest and principal on this loan .
second house is in my name with my wife as the jt owner .ther is no loan on this .
we have rented both the apts .in this case how to compute income tax payable.and who has to pay what?
Can I rent out both my houses which are under loan and stay I on rent? will I get the benefit of HRA + Tax benefit on my 2nd loan
I have taken home loan of Rs. 15 lac. In 2015 it will be completed. Now, after that if I am taking new home loan for say Rs. 15 lac again then what will be the benefits available to me? please note that my first house is not given on rent. It is being used by my family.
My friend has two house.One in Mumbai where he stays and One in Pune which he has rented out.The interest paid for Mumbai house is very high almost six times of what is paid for Pune.Is there a way by which he can claim interest of self occupied Mumbai house more then 1,50,000/-
I had taken home loan and after that i had extended the house and taken loan,
Whether I am eligible for interest on house loan for the extension of house total amounting to Rs. 1,11,000/-
Hi,
I have taken a second home loan (Advance Disbursed Loan Facility – EMI and i have not opted for pre-emi).The second home is under construction. Can i get income tax benefit by showing this as let out. I have self occupied the first home and getting the income tax benefit of 1,50,000. Please do advise. Thanks
I have taken 2nd loan for construction of 1st and 2nd floor on existing house. I am residing in same without any let o
ut. please advise me that I will be beneficial for both loan on same plot.
I have one house in Delhi on my name. It is self -occupied.I took loan and repaid it fully. I have a land in Gr NOIDA. I want to construct my house on this land.How can I get maximum IT rebate on 2nd home loan. i am 65 yr old
I have a self occupied property in Delhi and its loan is fully paid up.
I want to build a house on my land in NOIDA. I am 65 yr old.My annual income is 25 L
Can I get IT benifit ,if I take home loan. My wife has no property on her name
Tax exemption on paid Registration and Stamp Duty amount for 2nd home ?
I’m staying on rented flat
I owned my first flat (presently it’s on rent out) and now I have booked 2nd flat (under construction property and possession is in Dec 2016) and registration is due in Dec 2014
My Query – Is paid amount against Registration and Stamp Duty of my 2nd flat is tax exempted under 80c? & Can I claim for same in financial year 2014-2015 under 80C?
I have 2 homes in two different cities, both of which are on loans and both of which are rented out. I also stay on rent. How the tax calculations would be done if I show one of them as self-occupied, even if it is rented out. Would still the Annual value of the rented house (the one shown as self -occupied for income tax purpose) be considered zero and rent is not needed to be shown ? OR both the houses have to be shown as let out and tax calculations are needed to be done as for the let out property for both the houses ?
I am shifting from Mumbai,I have purchased 2 flats and paying EMIs of around 148000 and 130000 for both the flats.
Now, I am shifting to Bangalore
HRA amount I will be getting is around 200000,
Shall I eligible for getting income tax benefits on both the own flats EMIs as well as on HRA paying at Bangalore.
I know this is not possible,but what is the best possibilities to save tax in that case.
I’m a central govt employee. I’ve purchased 2nd house.
I need few clarifications regarding income tax computation.
1. As I understand, I need to declare 2nd House as LET OUT as first one is self occupied. So, when I declare it as LET OUT, I’ll have to show notional rental value, though it is empty. It is 46 sq.m. and is in Mansarovar, Jaipur.
I want to know how do I compute this notional rental value.
2. Wealth tax is also levied for 2nd house. Where should I show it in ITR2?
May I request your kind response.
i have taken a second top up loan against the same flat as my first loan. i am staying in a different state/city and paying rent. can i combine the interest i pay on both loans for tax calculation.
secondly – in both loans i have a co-borrower, will the rent i get get divided between the two of us as income?
Dear SirJi,
My wife is successful in 2014 housing scheme of DDA. She is alloted the flat in Narela G-2. In the application form, I was not the co-owner of the same.
My Question is can I, being the husband of the successful candidate, become the co-owner of this property now ? Its not about transferring ownership but Its about making me a joint owner of the property.
If yes, what will be the documents required ?
I am in the process to ask this from DDA officials also but I just want your valuable informal opinion about it.
Thanks very much.
Saurabh
I have two properties under my name:
1) Property in Mumbai (Loan is fully Paid). This is given out on rent.
2) Property in Bangalore on loan jointly owned between me and my husband.
I am planning to claim tax benefit against the Bangalore property.
How do I show the Mumbai property from a tax perspective?
I am having a home loan of 18lacs and I am paying EMI of 22k per month(2,64,000 per year) since November 2014. Now I am planning to take new home loan to buy another property. Please let me know, whether I am eligible for that. If yes then, upto how much I can apply for(considering my monthly salary is 1 Lakh).
Also I would like tell you that, my first property is in Hyderbad(occupied by my parents) and now I am planning to buy a new property in Bangalore(where I am working and staying in rented house).
So please let me know if I can go for new home loan for the new property in bangalore.
Thanks in advance,
Regards,
Prakash
If the maintenance fee payable to the society is included in the rent agreement with tenant can it be considered an expense above the standard 30 % deduction? If it is not clubbed with the rent will it be exempt from rental income ?
Dear Sir,
I am having a home loan from SBI for the purchase of a flat in Bhopal. I reside in Delhi. I am a central government’s employee. Can I avail a second home loan from my office (HRD Ministry) for the same property?
HI,
I have kind of different scenario.
I had a home loan and completed the loan by financial year 2014-2015. The loan taken with my Name + my Mother name. The Home place is different from my work location.
Now, I have given the home to my parents , and planning to buy/build a new home joining with my brother. The new home location is also different from my work location.
From the above scenario, the new home which I am going to buy will become my self occupied as I have given the old home to my parents.
Could someone let me know Can I avail the Tax benefit both Principal and Interest?
I have two houses. My first house’s EMI is just to finish and of the second I am going to take possession this month. I want to show my second house as using it for my own use and if I show the first one as rented how much should I mention as rent and if I do not want to take the rebate on the first house house and give all the details of only second house, is it justifiable. Or I must have to mention the details of both houses. Please reply.
Thanks
Hi Wealth wisher,
One of my friends having some doubts in Housing loan. He has 2 properties. 1 in Hosur (loan value 27 lakh) & 2nd in Erode (4.4 lakh). 1st property given for rent and showing income & tax receipt. And also availing tax exemption for 2 properties.
Now he is staying in rented house in Hosur and planning to take HRA exemption. It is possible to take 3 tax exemption? Under housing /HRA.
1st Property it is in hosur given for rent
2nd Property it in Erode (Parents are staying)
3. He is staying in rented house in Hosur (he wants to avail HRA under IT)
Please reply.
Thanks & Regards
Latha
I already cleared the loan of my house property which is not in my working place (i.e. at home town) andI took the new house property at my working location. I am paying the interest of Rs 300000 can all these amount be consisdered against Loss of house property?
I have a small outstanding of my 1st housing loan on a 2 BHK flat. But as the room size being small, I need a 3 BHK flat lately and wish to sell the current flat. Now if the take another fresh loan to do so ,am I eligible for another housing loan rebate in Income tax?
I have 2 flats at Chennai and both of the flats have been given for rental. Currently I stays at Bangalore in a rental house.I have loans for both the flats.Pl. advise how I can claim tax benefit.
Dear sir
i really appreciate your clarity of the subject.
I have taken joint loan for a under construction house in name of both of us (me n my wife, no share of ownership mentioned),EMI paid from my account.Can i avail 100% of tax benefit as my tax liability is more and i am actually paying EMI? If yes i can claim it for under construction house or only after possession.
i am planning to take plot + construction loan , again jointly, whether i should mention share of ownership to take more advantage on tax rebate on intrest component?
thanking you dear once again…for your valuable opinions.
Hello Sir,
My first home loan is closed and the property is in my mother’s name. Now am planning to buy a second house in my name. Will i be eligible for tax exemption on the second home loan. I will not be able to stay in both the home. In that case how about HRA exemption. Please guide me…
Sir,
Thanks for beautiful articel. However i have few questions.
1) I have a home loan for a flat purchase in november 2011 with me and my wife are joint owners of and myself only availing tax benefits both principal and interest ( though my wife is also working) till this financial year.
Now i am planning to buy another home ( construction not yet started and possession will be around 2017 January) which is in same city and i need to go for home loan by making myself as well as my wife as Joint contributors for this new EMI.’
Sir please tell me how to get benefitted from second home loan. I will be letting out my first house from january 2017.
Can i show total interest component paid for second house in my Tax Submissions along with my first home loan Principal +interest?
Can my wife eligible to show Principal component of second house in her tax submissions?
How should i show total two home loans in my TAX submissions if my wife took a break from her job?
Hello,
Thank you for an interesting perspective. we both wife n husband work. The home which we occupy now in Mumbai is loan free, Loan was on me and i paid the EMI, took the benefits over the years. Wife also works, has HRA but never took any benefit. Now we brought a new flat where my wife is the first owner and me being the second. have few querries:
A) Can I claim tax benefit on my second house, if i take a loan?
B) Since my wife has not taken any home loan till date, is she also eligible for home loan for 2?
C) We plan to buy a property in hyd for my parents, can I take it on my wife’s name, as her second home…? Kindly help with your insights. Thanks in advance…
Thanks for clear explanation, example really helped to understand the calculation. I am planning to buy second home, by taking 2 loans,
1) first a topup loan from my existing home loan ( 1st property) , basically to pay 20% amount for new home,
2) and then second home loan to pay remaining 80%.
While calculating interest for second property, can I sum the interest paid on topup loan and interest paid on new home loan account ?
Appreciate if you can clarify.
Dear Manish,
You can do the funding of the new house as you planned, but you cannot include the interest of top-up loan as deduction from income. But do you think it’s wise to buy a second home by taking 100% amount on loan? Shouldn’t you plan and save for it?
Thanks all for teh wonderful discussion. I have a question as below:
I have two homes(both on Loan at this point) and I claim the full interest on my second home. My first home loan is about to be over. Once it is over, Can I still claim benefits on full interest on second home or if the second home shall be treated as first home (limiting tax benefit up to 2 lakhs)?
Thanks Once again
Hi Neel… I took a bit of time to respond as i also wanted to be sure, so consulted an expert…Yes you can claim tax benefit for the second home.
Hi Krushna,
My question was if the second home loan would become part of 80C after the first home loan is paid of ? OR if I can continue to claim for complete interest deduction of second loan (while my first loan is unpaid)?
Thanks
Me and my husband has taken joint home loan to buy a house. We both are co-owner and co-borrower. Joint home Loan account has both names i.e. me and my husband. I am paying the full EMI and it is being paid from my account.
To submit investment proof in company Bank has issued provisional certificate under both names. There is no ownership ratio in sale deed, nor we have any agreement that I can claim full 100% benefit.
Now we are in process of divorce. And my husband is claiming 50% tax benefit, though I am paying the full EMI which is deducted from my account. And my husband is not paying at all towards home loan repayment.
My question is Can I claim 100% tax benefit when I do not have ownership ratio in sale deed, nor I have any agreement that I can claim full 100% benefit ?
Dear Yamini,
These are the emerging tough scenario, probably our lawmakers also did not think of. Our income tax rules are laid down on self-assessment rule. This means that department will set the rules/exceptions/exemptions/deductions/rebates and individual will self-asses his tax. In case of housing loans it is a common practice to include both husband and wife if both are working. But it is clear that the rebate will be claimed by person who is paying the EMI. In your case EMI goes from your income and to back this you have your bank statement. So if your husband is claiming 50% he has to prove that he contributed 50% of EMIs too. So when he is declaring 50% of tax benefit for the EMI he is at fault (a wrong self-assessment). Hence, I don’t think its wrong if you claim 100% tax benefit.
Dear Sir,
If I buy a house totally in my name and later if my wife buys another house totally in her name ….. For income tax purposes is it clubbed ? Or we can have two seperate houses in our own individual names and count those to be our self occupied houses?(we have no other houses and currently stay in a house owned by my mother)…. Both these houses which we are planning to buy are in two different cities though we live together in Bangalore.
Also if it is clubbed then can we buy the home in the name of HUF or is there any problem regarding the same?
Thanks in advance
Regards
I have house in Hyd (as joint-co applicant and co borrower as spouse, 75:25).
We are staying near office in rented house due to water problem and schools are not near to my own house. I have given rent to my parents and nothing paying as rent.
in that case can I mention minimum govt value for the rent as income. if that is case is there any where can I find the details of minimum rental values to properties for the city with area wise.
Kindly guide me on the above.
My wife had a site in her name before the marriage. Me and my wife had taken joint home loan for construction in 2005, We both are co-borrowers. As my wife was housewife, I was paying the EMI till April 2016 and i was claiming 100% Tax benefit. There was no agreement on the ratio of co-borrower-ship.
Now we are separated, but not legally, because of considering the futures of our Children. Now the whole property is in her control and the maximum loan amount is repaid by me and she is now agreed to repay the remaining loan, because the loan amount remaining is negligible and the property is pledged in the Bank. In the month of June 2016, I had purchased a new flat. Now this has become my second housing loan and second Tax benefit on HBA. In my case how can i calculate the Tax benefit. Neither the first property is in my name nor i am getting any rent from the first property.
I have a home loan for under Construction Building. Now the Builder has cheated and is behind bars under CBI enquiry and will be convicted.
Meanwhile I am paying EMI for the amount of disbursement bank has paid to builder.
Now If I book another flat somewhere else, will that be my second home loan?
Can I get the tax benefits like the interest & principal for my second loan?
If any one has an idea, please guide.
Yes this will be treated as second home.
1st home: single ownership, availed home loan, claimed home loan in IT return as 1st home, Loan is now close.
2nd Home: My Father taken a home loan after my 1st home loan gets complete, its a constructed house in his name and I am co-borrower in this loan, which I am paying completely.
Q-A): Now, for 2nd Loan, should I claim in IT as home loan or let out property?
Q-B): Since I am co-borrower, but not a registered owner in paper, Should I consider this as my home loan/my let out property?
Sir,
I have one home which I occupied currently. My parents leaves in another city and I am planning to buy home there which will be occupied by my dependent parents.
So in this case I would not be receiving any Rent income but I would be paying Loan on both.
So, what would be the Tax Implication? Is it allowed to show both property as self occupied?
Regards,
Amar
Sir I have 2 homes at 2 different cities. which home should show as self occupied and which one let out (As both homes are occupied by my own family- which are equal to vacant.) having following interest & principal components.
Home-1
Principal Component – 58569/- & Interest Component 180543/————(Property Tax —-9000/- per year)
Home-2
Principal Component – 33669/- & Interest Component 86139/——(Property Tax —-4000/- per year)
So I can get maximum tax benefit in India.
Regards,
Vaibhav Wagh
Thank you so much, sir.
This article was an aye opener.
I was undecided on getting a second home.
You have explained things so well.
Thanks once again.