Homeloan tax benefit

Tax queries 742 views 2 replies

Shiva

Manager

27 Points Joined May 2012

Dear sir,

I have two houses, one is selfoccupied and loanfree and the other is rented and is having BANK loan.

1) Do I get the unlimited (Home Loan Interest) deduction from the total income for the rented house with the rent collect shown as income?

2) Is there any benefit for the Principal amount paid?

3) Since I stay in my own house (loan free), do I get any benefits related to HRA?

I have browsed lots of solutions to mulitple homeloan benefits but none of the answers fit for my question. Please help me understand my specific case. Thanks in advance.

Replies (2)

Giridhar S Karandikar

Team Lead

7558 Points Joined November 2011

1]. Yes u would get benefit of actual interest paid during the year, as in respect of let-out property, there is no limit for interst paid on home lona taken unlike in case of self-occupied where only dedn of 1.5lacs can be taken.

2].You will get benefit of principal paid u/s 80C upto Rs. 1lacs only

3]. HRA benefit can be taken only if you are staying in a rented premises, receiving HRA from your co & you are paying rent. As you are staying in your own house, no benefit of HRA can be taken.

yuvak

Practising CA

144 Points Joined January 2010

Giridhar is absolutely correct..you are able to adjusted the entire interest amount on the loan related to let-out/ rented property (this may even result into negative income)..as for the self occupied one, no adjustment..