Home loans and income tax benefits

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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.

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On 23 January 2012 at 23:52 Report
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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                                        .........................................

 

1 Reply
On 24 January 2012 at 10:03
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Service
30 Points Posted on 24 January 2012

Thanks for the reply.

Kindly help on the query.

1. Since I would be renting my Mumbai Property, so the rebate on Interest would be "No Limits" or 150000/- as mentioned below.

2. From where we can get the information on Municipal Valuation.

"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       

 

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On 24 January 2012 at 23:01
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CA in Practice
445 Points Posted on 25 January 2012

Sorru,.. there is no limit for the interest on loan for the let out property at Mumbai. What i mentioned in my reply was wrong.

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On 25 January 2012 at 10:21

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