It implication for the second home

This query is : Resolved

Lalit (Querist)
Follow

02 January 2013
As I understand, if I have two housing property, I will be able to do the following:

1) Property 1 Loan - 1 Lakh principal deduction and 1.5 Lakh interest deduction (self occupied, no income)
2) Property 2 Loan - No principal deduction and no-limit interest deduction + add rental income

I would like to know, if I do not have any outstanding loan against Property 1 (closed by making pre-payment), can I still consider Property 2 as second property and take no-limit interest deduction?

So, from the following, will it be 2.A or 2.B?

1) Property 1 - No loan, No deductions, No rental income, self occupied
2) Property 2 -

2.A) No principal deduction and no-limit interest deduction + add rental income (as this is still second property)

2.B) 1 Lakh principal deduction and 1.5 Lakh interest deduction (considering I have only one home loan)

Thanks in advance for your replies.

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

02 January 2013 Yes, provided it continues to be a RENTAL one.

Anand

Anand (Expert)
Follow

02 January 2013 For property given on rent you can claim
a) Rs. 1,00,000/- against principal. since you are not claiming anything against the Self occupied Property

b) No limit interest deduction since the second property is let out/deemed to be let out.

Upgrade to CAclubindia Pro. Subscribe Now!