Home loans and income tax benefits

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Sunil Gupta

Service

30 Points Posted on 23 January 2012

Hi Friends,

I want to know income tax benefits on second home loan.

I am living in Mumbai, presently on rent. I have a property in Delhi which is lying vacant. Presently I am availing HRA exemption + income TAX rebate on the property as 150000/- (Interest) and 100000/- (principal) amount.

I want to purchase ready to move property in Mumbai. But I would still be staying in rented house and will put the new property on rent.

In that case, Kindly confirm :

1. Whether I would be getting HRA exemption as earlier

2. Whether my property at Delhi would be treated as earlier {150000/- (Interest) and 100000/- (principal) amount}

3. Whether my rented-out property at Mumbai would be giving income tax rebate on interest (No limits) as "Annual Value (Rental Income) – 30% as the standard deduction – Interest Payable on home loan = Income from house property"

Thanks in advance.

Replies (3)

Vinod

CA in Practice

445 Points Posted on 24 January 2012

1. You can enjoy the exemption from HRA even after having a propert at Mumbai which is let out. There is no restriction in Sec. 10(13A) in this regard.

2.Property at Delhi shall still be treated as un occuppied property (owing to your employment at Mumbai) and the annual value shall be NIL. Interest can be deducted up to Rs. 150,000/-.

3. The income from Mumbai property shall be as follows:

Gross Annual Value Gross Rent or Municipal Valuation whichever is higher

Less: Municipal Taxes ......................................

Net Annual Value ......................................

Less: 30% of NAV ........................................

Interest on loan (Max Rs. 150,000/-) .......................................

Income from House Property .........................................