Tax benefit on 2nd home

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 May 2014 I purchased first home in Mumbai in 2008, the home loan for this property was repaid in 2010. I occupy this home.
in 2011 I purchased 2nd flat in Mumbai with a home loan, I have rented out this flat. I get Rs. 20K as rent and I pay EMI of Rs. 86K for this flat. I have currently only 1 home loan for the 2nd flat.
I have 2 questions:
1. What is the tax benefit I will get in this scenario?
2. Someone has suggested me not to pay prepayment and take benefit of interest that I am paying for this home loan.
Request your advice.
Thanks

ALok

CMA Girish P

CMA Girish P (Expert)
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23 May 2014 here the scenario is
-> HP was purchased by taking loan
-> Let out the same.

In this case you can claim tax exemption U/S 24 B for entire interest income paid restricted to taxable income on HP.

CMA Girish P

CMA Girish P (Expert)
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23 May 2014 Most of the people got confusion that if they are not settle the loan they can enjoy the tax benefit for HP. Please understand that always your interest payable amount was higher than tax saving from it.

You should calculate how much you can save if you prepay the loan.

some of the bank collect pre-closure charges for settling the loan before due.

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