Second home loan

Tax planning 617 views 3 replies

Kumar

Others

33 Points Joined December 2013

I have an existing home loan for the house which i am staying currently. The Interest for that loan is around 45K for 2013-14.

I took another home loan for second house. The EMI started from July 2013 and the house has got registered in Nov 2013 and is ready for occupation. However due to some circumstances, i won;t be moving into this house until June 2014. The interest for this home loan is around 4 lac+ for 2013-14.

1. How do i show these two loans for the tax purpose ?

2. I understand that the second house will be Deemed Let Out property. Will it be deemed let out after day of registration ?

3. How is notional rent calculated for above ?

thanks

Replies (3)

Guest

The first loan interst: deduction u/s 24(b) can be claimed

The first loan principal repayment: deduction u/s 80C can be claimed(max Rs 1L)

The second house was ready for occupation in Nov 13. But Annual value means the value which a property would fetch from yr to yr. So it would mean the rent which a similar property would get for the whole year.

Also, you can get deduction for the whole of loan interest from July 13 against this + house tax + repairs @ 30% of annual value.

It is advisable that you actually let out this property.. because in that case the rent recd from only Nov 13 to March 14 would be considered and all the other deductions would be given.

Kumar

Others

33 Points Joined December 2013

Thanks Madhavi.

I am able to get renter for the house from 27th Dec. Based on your reply, pls. confirm if the below calculation is correct:

1. Loss from let out house property is as follows:

18000 * 3 (jan-march) = Rs. 54000/- [Rent is 18K per month]

Repairs = 30%*54000 = Rs. 16200/-

Interest on Loan = Rs. 3,94000/-

Total Loss = Rs. 3,56200/-

2. Loss on Self Occupied Property

Interest on Loan = Rs. 40,000.

Total Loss on house property = Rs. 396200/-

Guest

If due to vacancy, the annual rent received is lower than the expected rent, then the annual rent realized is taken as the gross annual value. However, this rule will be applicable only, if the decline is only because of the vacancy.

In my view, your calculation is correct. pl wait fr more replies.