Buying Second House in Same City

u can avoid long term capital gain by purchasing a new house u/s 54....on new house also u can avail the benefits as it will be a separate house property...it doesnt matter whether its in same city or not....it will be taxed separately under H.P

Hi Sneha,

So you say I can buy another house and take the Income Tax benefit for second home also? And the money which I get selling first home utilised for buying second home will be exempted under sec 54 is it?

Is it not like that the first house for which I already took IT benefit can not be sold before 5 years otherwise I have to return the IT benefit ? I heard something like this.

hie...actually it has to be a long term gain to avainl exemption u/s 54...so for that u have to wait fr sometime...and about the 2nd query m not sure..wait fr others comments..

Originally posted by : Nilesh Panchal
	Hi Sneha, So you say I can buy another house and take the Income Tax benefit for second home also? And the money which I get selling first home utilised for buying second home will be exempted under sec 54 is it? Is it not like that the first house for which I already took IT benefit can not be sold before 5 years otherwise I have to return the IT benefit ? I heard something like this.

what kind of incometax benefits you have availed, we are unware, if 80C then you have to hold for 5 years. 

Yes,

I have availed Tax Benefit under Section 80C for Principle and Interest. Also, I have cleared my all loan. So can I buy new one without selling first and get again the IT benefit under section 80C for second house?

principal repayment can be considered as a valid investment under section 80C only if it is made for a self occupied house. That is, you should be living in the house for which you are making the principal repayment.

The only exclusion is if the house is not in the city in which you are working – in which case you can claim the principal repayment as an investment under sec 80C even if the house is not self occupied.

Example: If you work and stay in Mumbai, and have another house in Mumbai for which you are paying the EMI, you can't claim the principal repayment under section 80c for this other house. But if you are working and staying in Pune, and have a house in Mumbai for which you are paying the EMI, you can claim the principal repayment under section 80c. This is true even if you have rented out the house.

Another important point is that there is no restriction on thenumber of houses for this benefit – the only restriction is that the house should be self occupied.

Thus, if you are working and staying in Pune in your own house for which you pay EMI, and have a house in Mumbai for which you are paying the EMI as well, you can claim the principal repayment under section 80c for both the houses as you are satisfying the “self-occupied” rule (with the allowed exception). This is true even if you have rented out the Mumbai house.

So,

In my case I have one house in Mumbai and I buy another house in  Mumbai, and I stay in my second house and first house in rented then can I claim for second house asit is self occupied?