Your Guide to the Tax Benefit on Multiple Home Loans
Mar 29, 2019 Home Loan
There is no restriction on the number of homes and the home loans one can take. If it fits your budget and you seem like a promising borrower who will return the money that has been loaned, then the banks will give you as many home loan as you require.
But what about the tax exemptions if you have multiple home loans! Well, you can claim tax exemptions of various home loans as well.
But what about the tax exemptions if you have multiple home loans! Well, you can claim tax exemptions of various home loans as well.
The tax benefit for payment of interest
Under Section 24(B) of income tax act, the borrowers can claim the deduction for interest payable for the construction, repair or renovation of the property. If you own a self-occupied house, then in such case the upper limit of deduction of interest payment if Rs 2 Lacs. But if the construction or the renovation has not been completed on time, i.e., within the stipulated period of five years, then the upper limit reduced to Rs 30,000.
If the property is on rent, then the deduction on interest can be claimed for the rest of the duration without any restriction of the upper limit on the rent amount received on the rental property. One thing to note is that if there is more than one property self-owned by you, then one of them has to point out as a let out for which the notional rental income has to be paid as part of taxation which is equal to the amount of that property. The entire tax benefit for the property can be claimed if it is shown as a let out property.
For any commercial or residential property, the deduction on the interest payment can be claimed regardless who is letting out the loan, a bank or any other financial institute. Any amount paid during the construction of the house can be claimed in five instalments of equal value from the time the construction begins to the time the property has been handed over to the borrower with the possession certificate.
If the property is on rent, then the deduction on interest can be claimed for the rest of the duration without any restriction of the upper limit on the rent amount received on the rental property. One thing to note is that if there is more than one property self-owned by you, then one of them has to point out as a let out for which the notional rental income has to be paid as part of taxation which is equal to the amount of that property. The entire tax benefit for the property can be claimed if it is shown as a let out property.
For any commercial or residential property, the deduction on the interest payment can be claimed regardless who is letting out the loan, a bank or any other financial institute. Any amount paid during the construction of the house can be claimed in five instalments of equal value from the time the construction begins to the time the property has been handed over to the borrower with the possession certificate.
Tax benefit on principle repayment
Under the section 80C of income tax act, 1961, one can claim up to Rs 1.5 lac for principal repayment for the home loan, including the stamp duty charges and cost of registration. Even though home loans can be taken for multiple properties, the deduction is available for only Rs 1.5 Lacs.
The borrower can enjoy the deduction only after the property has been given a possession certificate. If the property is still under construction, then there is no deduction available.
The borrower can enjoy the deduction only after the property has been given a possession certificate. If the property is still under construction, then there is no deduction available.
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