I have taken a home loan but now wish to take a second one. Is it possible?
—Rajit Kanwal Under the provision of the Income Tax Act and as per the banking laws, there is no restriction on how many properties you can buy or the housing loans you can take. The loan on the second property will be available provided your income is suf- ficient enough for servicing both the loans. The tax treatment is also different for those who own more than one property.
In case you own more than one property and both are either occupied by you or your relatives, you have the option to treat one of the properties as self-occupied. After a particular property is taken as self-occupied, the other property will be deemed to have been let out and a notional income equivalent to the rent expected to be realised on such property will be treated as rental income in respect to the other property.
The annual value of the self-occupied property is taken at nil and a person is entitled to claim interest payment for loan taken to acquire such property up to a limit of R1,50,000. You can also claim income tax benefits towards repayment of housing loan on both properties put together within the overall limit of R100,000 under Section 80 C.
The taxable income of the second property will be arrived at by deducting actual interest in full payable in respect of such property without any limit from the notional rent taken above as well as 30% of rent as standard deduction. You will be able to claim tax deduction benefits under Section 80 C in respect of the stamp duty paid in respect to the second property also within overall limit of R100,000. This benefit is available during the year in which you pay the stamp duty.
I am staying in a rented house for which I claim HRA for tax exemption. Now if I buy a house in some other city (say Hyderabad) on joint home loan with my brother, can I claim both HRA and home loan for tax exemption?
—Tarik Mehdi If you and your brothers are owners or co-owners of the property you can get tax benefits for the home loan repayments and for interest payments in the ratio of your respective shares in the loan. You can also claim exemption for HRA for actually paying rent to stay in a rented house. To claim tax exemption, it does not matter in which city the rented house is located. What is important is that you should be able to prove that you are actually paying the rent for the house that does not belong to you. My native place is Kolhapur but I am working in Mumbai. I want to take plot /flat in Kolhapur. Can I get a home loan and tax benefits?
—K Mehta Yes you can get a home loan, which will be subject to your ability to service it. It is advisable to take a loan from a bank with branches in both the cities.