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Homeloan tax benefit

Shiva (Manager) (27 Points)

21 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.

 2 Replies

Giridhar S Karandikar (Team Lead) (7320 Points)
Replied 21 May 2012

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)
Replied 21 May 2012

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..

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