Tax implication - 2nd house (co-owned)

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Hi,

Me and my husband co-owned one house where we are staying currently. We purchased one more apartment in 2011 and it is still under construction. We both fall under the 30% tax bracket. Also, we have not taken any loan in either of the property. 

Query 1: what are the tax implications for the 2nd property? 

Query2: From when we need to pay the deemed tax as I do not think we can either occupy or rent the 2nd property immediately after getting possession from the builder?  

Query 4: What about the wealth tax for the 2nd property?

Query 5: Can I declare the 2nd property as self-occupied even though I am staying in the 1st property considering the fact that the price (current as well as buying ) of the 2nd property is much higher than the 1st.

query 6: Does it make any sense to take home loan to repay the balance 10% amount for the 2nd property?

Thanks

Kalyani

Replies (3)

You may treat any one property as self-occupied and the other as deemed to be let out. If you obtain a home loan from a bank for paying off balance 10%, then interest actually paid shall be available for deduction u/s 24 from the gross annual value while computing income from house property.

Interest will be allowed as deduction u/s 24(b) and principal will be allowed as deduction u/s 80c
Once the property is ready for possession it will be deemed to be let out even if you dont put it on rent and thus taxable.

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