Question : Income tax saving from two different housing loans for two different properties?
I have purchased a flat in 2004 and i am claiming for rebate since then in my income tax for hosuing prinicipal and interest component. Recently in 2008 i purchased another flat with a new housing loan. Does the interest component of second flat also be considered for tax exemption including the earlier one?Please clarify.ThanksSandeep
- asked by sandeepagarwals
All Answers:
Answer #1
No idea.
- answered by Nitha
Answer #2
Q-1). I have purchased a flat in 2004 and i amclaiming for rebate since then in my income taxfor hosuing prinicipal and interest component.Ans:You are correct.Q-2). Recently in 2008 i purchasedanother flat with a new housing loan. Does theinterest component of second flat also beconsidered for tax exemption including the earlierone?Ans: Repayment of principle amount on both thehouses are eligable for deduction u/s 80c subjectto Max limit of Rs.1 lakh including the otherinvestments in Sec.80C. Regarding the interestportion, the house which you using for your own(self occupied), interest paid on that house canbe claimed as deduction up to 1.5 lakhs.Now let'ssay you stay in a self-owned residence andpurchase another property. This could be for yourparents or for self-occupation. But, it has notbeen rented out. In other words, this too is forself-occupation. This second house cannot betreated as self occupied, since that is the statusgiven the first house and you can claim thatstatus only for one houseHere is where the favourfrom the tax department ceases. The tax departmentrequires that you pay tax on the notional rent onat least one of the houses. Notional rent is therent you would have got had you given the house onrent. As an owner of two homes, you can choose aself-occupied property and the other will be taxedon the basis of notional rent. You can also changeyour choice from year to year. Using the aboveformula, the income from such a home will becalculated. Since this house is treated as beingrented out, for income tax purposes the deductionfor interest is not limited to Rs 1, 50,000, youcan claim actual interest (It may be 5 lakhsinterest or more).The interest on the 2nd house isfully exempt as you are renting it out or selfoccupied. As you are going to pay tax on therental value, you can claim full interest asdeduction from the rental income. More details canbe read from the below website.
http://www.apnaloan.com/taxtips/home-loan-india/deductiononmorethanoneproperty.html
- answered by N.J.Reddy
| 
measure and fulfill your financial needs
