I have two housing properties. The second one was purchased recently and both are taken on housing loan. Total loan amount goes to (₹13 lakh to ₹ 6 lakh) and the remaining amount is ₹ 19 lakh. I am staying in one house and my relatives are living in the second one so I don’t have any income from housing property. I am already taking tax benefits on the first property. Can I avail tax benefits on both properties? Can I also apply for tax benefit on stamp duty of second property - something that I have already done for the first property?
—Prateek Dixit There is no restriction on the number of properties a person can own under the provisions of the Income Tax Act. However, in case a person owns more than one property and both are either occupied by himself or his relatives, the person has to treat one of the properties as self-occupied. Once a particular property is opted as self-occupied the other property will be deemed to have been let out. A notional income equivalent to the rent expected to be realised on such property will be treated as rental income for this.
The annual value of the property treated as self- occupied is taken at nil and a person is entitled to claim interest payment for loan taken to acquire that property up to a limit of ₹ 2 lakh. The taxable income of the second property will be arrived at by deducting actual interest payable in respect of such property without any limit from the notional rent taken above as well as 30% stand- ard deduction on the notional rent offered for tax.
You can also claim income tax benefit towards repayment of housing loan within overall limit of ₹ 1.5 lakh under Section 80C.
You will be able to claim tax deduction benefits under Section 80 also in respect of the stamp duty paid in respect of the Second property within the overall limit of ₹ 1.5 lakh. You can do this even if you had claimed a similar deduction for another property in another year.