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Best tactics for home loan income tax

Pradeep Kumar (director) (65 Points)

29 December 2013

Dear all,

I have a query on home loan income tax.

I currently live in house in banglaore (self occupied) which is loan free.

I have also booked another flat nearby for which I am planing to take home loan.

I understand that I cannot avail tax benefit under section 24 as I will not occupy this property. Hence I would like to see if I can avail 2nd home loan income tax benefit (complete intrest is tax free and giving deemed rental income).

Please let me know if I can do this. Also, this new flat is under construction and will be ready to occupy in 2-3 years.

Please help me understand my possible options to effectively manage my income tax.

Thank you and appreciate your response.

-Pradeep

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2 Replies

CA and CMA Ravinder Singh (CA and CMA) (853 Points)
Replied 29 December 2013

Hello pradeep as far as i know..... 1. you can claim the benefit of self occupied property in respect of only one house property.....the other will be deemed to be let out... 2. Under construction property will not be considered as house property for the purpose of claiming tax relief. 3. If you are taking the loan for construction of house property, then you can claim the benefit of pre construction intt and previous year intt. U/s 24....and principal amnt u/s 80c.. 4. If you are taking the loan purchase of house property, then you can claim the benifit of previous year intt and principal amnt..... 5. The benefits will be available only after completion of construction nt bfore that..

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Pradeep Kumar (director) (65 Points)
Replied 29 December 2013

Originally posted by : Ravinder Singh
	Hello pradeep as far as i know..... 1. you can claim the benefit of self occupied property in respect of only one house property.....the other will be deemed to be let out... 2. Under construction property will not be considered as house property for the purpose of claiming tax relief. 3. If you are taking the loan for construction of house property, then you can claim the benefit of pre construction intt and previous year intt. U/s 24....and principal amnt u/s 80c.. 4. If you are taking the loan purchase of house property, then you can claim the benifit of previous year intt and principal amnt..... 5. The benefits will be available only after completion of construction nt bfore that..

Thanks for your reply.

I am aware that I cannot avail tax benefit under section 24 if I am not residing in that property. What I need to know is if I can get tax benefit for the 2nd home. Please note that my current home where I am staying is free of any loans. In other words, without claiming anything under section 24 (loss of house property upto 1.5 lack interest claim), can I just claim income tax benefit for 2nd house (as the let out property)?

Is it a must to claim first under section 24 first to qualify for the eligibility for 2nd home tax beneft? My self occupied is free of any loan and hence I am not claiming anything under

Appreciate your thoughts.

Thanks, Pradeep