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Jan 2018

Tax and home loan benefit if you own multiple homes

Tax and home loan benefit if you own multiple homes

Generally, people are under the impression that they can buy any number of properties but can’t take more than one home loan at a time. This actually is not true since there are no restrictions on property numbers that one can own, also there is no restriction on the house numbers for which one can take the loan or claim the tax benefits. The amount of the home loan that one can take the loan for all the properties together depends on the earnings as well as the ability to service the loan.

Tax benefit on interest payment
You can claim for the interest deduction on the loan amount payable, taken for construction, purchase, renovation or repair of property under Section 24b. In case one owns a housing property which is actually occupied by you, the maximum deduction can be claimed on the interest repayment on the loan for the property which is restricted to2 lakh/annum. In case the money is borrowed, however, after April 1st1999 as well as construction of property is actually not completed within the time period of 5 years from the end of financial year in which money the, the deduction in respect of interest claim shall actually be restricted to only Rs 30,000.

In case, you let any properties or the property owned by you, one can really claim the deduction for complete interest paid, without any of the upper ceilings against rental received in respect to each property. In case you own one house property, however, as more than one house occupies by you then choose any property as the self-occupied and other properties/property are treated as it let-out for national rental income which is based on the property rent which is expected to fetch, required to offer for taxation. Thus, ant property is treated as to let-out, claim the tax advantages for the complete interest paid for the money that is borrowed in respect to the property that treated as let-out.

The deduction on the payment of interest is available for any commercial or residential property which is owned by you. Also, it is available irrespective of the money borrowed from the housing company or bank or from the relatives or friends for purpose of the purchase construction, repairs, reconstruction, etc.

Any of the interest paid during the period of construction which can be amortized as well as can be claimed in 5 equal installments, beginning from years in which construction is possession and completed of the house taken.

Tax benefit on repayment of principal
According to the provisions of Section 80C, you can actually claim up to Rs 1.5 lakhs for the repayment of housing loan that is taken from the specified institutions including the registration cost and the stamp duty of the residential house. Though you can actually take a home loan for more than a single property, the amount of the deductions shall be restricted to Rs 1.5 lakhs. The complete deduction fo amount includes other items such as life insurance premium, provident fund contribution, PPF contribution, tuition fees, ELSS, NSC, etc.


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