Home Loan rebate on second loan

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Uttam Singhal (Querist)

04 March 2011 Hi,

I had a home loan for a property in Delhi city. I availed tax exeption on the same for 5 yrs and after that I closed the home loan 2 years back. Now I am planning to buy a second house in Hyderabad city as I have shifted to Hyd.
My question is: What does the IT law says about the new home loan exeption on this second house. Will I get any tax rebate on principal or interest?

Mind it I am open to declare my first property in Delhi as rented or self occupied as per the convenience.

Please explain the law and suggest as appropriate.

Thanks much.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

06 March 2011 You are going to purchase a new house in Hyderabad. It is really a nice city.
In Income Tax law there is no restriction that a person can avail housing loan benefits in respect to one residential house only.
You will certainly get Interest and Principal Payment deductions.

As you will reside in the Hyderabad House,
It will be treated as Self Occupied.

You have to show your Delhi House as let out or deemed let out.

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