Income tax excemption on second home

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Sakthi (Querist)
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24 January 2012 HI,
I have purchased a flat using home loan and is residing in it. I am getting 1.5 lakhs income tax excemption on this forst home loan.
I am planning to purchase a second home in my home town. i am planning to rent it out. but the rental income is very less. How do I calculate the interest excemption for this case.

loan planned 30 lakhs
planned repayment 5 years
proposed rental income : 3000 PM

How do i know the municipal taxes and standard excemption.

Can anybody help me calculate this.

Regards,

Sakthi

CA. Vikash Dwivedi

CA. Vikash Dwivedi (Expert)
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24 January 2012 Dear Sakhthi,

you plan is good. you must go ahead with purhcasing of your new house.But Remember
Income Tax Act does not give you liberty to enjoy dedection twice on House Property.
understand the basic logic. Deduction is given to relieve an individual from IT on basic need House. If you are purchasin 2nd house then it is no more a need but becomes investment which is subject to Tax.

once you purchase house you will have two houses, IT gives you liberty to choose the one with which you can save Max tax.