Here is how One can Claim Tax Exemptions on Multiple Home Loans
Jun 13, 2018 Legal Guidance
There’s a common misconception that a homebuyer cannot take more than one home loan at a time. But it is not true. A homebuyer can buy as many homes as they wish and take as many home loans for the same. One’s income and ability to pay back the home loan does play an important factor in the amount of home loan one can take.
A homebuyer can also claim for necessary tax exemption on the multiple home loans.
A homebuyer can also claim for necessary tax exemption on the multiple home loans.
The tax benefit for the interest payment:
Under section 24B of income tax Act, one can claim the tax deduction on the home loan taken for repairs, renovation or construction. But if one owns only one house and it is self occupied, then the upper limit of the tax deduction one can claim is restricted to Rs 2 Lacs. If the construction is not completed within five years of loan taken and the loan is taken after 1st April 1999, then the deduction permitted is Rs 30,000.
If the property is let out or rented out, the deduction can be claimed for the entire period of interest with no restriction of any upper limit on the rent amount received for the property or properties.
One key point to remember is that if one self occupies more than one property, it has to be noted as a let out for which a notional rental income is expected to be paid as a part of taxation which is equal to the amount of the rent that the property is expected to receive. Once a property is considered a lot out, then the tax benefit for the full interest paid can be claimed for the money borrowed.
For any property, whether commercial or residential, the deduction in the interest can be claimed irrespective of the source for the loan. Any interest paid during the construction, renovation or repairs of the property can be claimed in five equal instalments, from the year the construction began to till the year the construction was completed and the property was handed over to the owner.
If the property is let out or rented out, the deduction can be claimed for the entire period of interest with no restriction of any upper limit on the rent amount received for the property or properties.
One key point to remember is that if one self occupies more than one property, it has to be noted as a let out for which a notional rental income is expected to be paid as a part of taxation which is equal to the amount of the rent that the property is expected to receive. Once a property is considered a lot out, then the tax benefit for the full interest paid can be claimed for the money borrowed.
For any property, whether commercial or residential, the deduction in the interest can be claimed irrespective of the source for the loan. Any interest paid during the construction, renovation or repairs of the property can be claimed in five equal instalments, from the year the construction began to till the year the construction was completed and the property was handed over to the owner.
Tax benefit on interest repayment:
Under Section 80C of the Income Tax Act, 1961, up to Rs 1.5 lacs can be claimed for the principal repayment of the loan including stamp duty charges and cost of registration. Home loans can be taken for various properties but the restriction is up to Rs 1.5 lacs only. PPF contribution, life insurance premium, tuition fees, PF contribution etc are included in the deduction amount.
However, the benefit can only be claimed after the possession of the house. If the repayment of the principal amount has started before the possession of the house, then the benefit cannot be claimed.
The loans from friends and family cannot be considered for this deduction.
However, the benefit can only be claimed after the possession of the house. If the repayment of the principal amount has started before the possession of the house, then the benefit cannot be claimed.
The loans from friends and family cannot be considered for this deduction.
Looking for property portal?
Related Articles
-
Know about Tax Benefits That you’re Property Offer
Oct 22, 2016 -
-
-
See comments (0)
Write a comment
