Home loan and tax benefits if you own multiple homes

News

In India, there is no limitation on the number of properties you can purchase. In addition to that, the major advantage is that there is no restriction on the number of houses for which you can take home loans and claim tax benefits. These benefits are available either under the tax laws or banking laws. However, the loan amount that you are eligible for depends upon various factors like your earnings, age and your ability to service the loan. You can avail certain tax benefits for interest paid and for repayment of the principal amount, with respect to your home loan.

Tax benefit on interest payment

Under Section 24(b), you can claim deduction for interest payable on a home loan. This deduction on interest is available for any residential or commercial property owned by you.In case of a property that is under construction, this deduction is available from the year in which the construction is completed and possession is taken.

In case you own only one residential house, which is occupied by you, the maximum deduction on interest repayment is restricted to Rs.2 Lakh per annum. However, in case of money borrowed for construction of a house,this deduction gets restricted to Rs. 30,000, if the construction is not completed within a period of five years.Therefore, it is very important to get the construction completed within the stipulated time limit.

Tax benefit on repayment of principal

As per the provisions of Section 80C, you can claim up to Rs. 1.5 lakhs for repayment of the principal component of a home loan. This deduction is also applicable for any amount paid for registration and stamp duty of a residential house. According to the income tax laws, there isn’t any restriction on the number of houses for which you can claim this deduction.In addition to that, the income tax laws do not differentiate between self-occupied property and a let-out property. Therefore, although, you can take home loans for more than one property, the aggregate amount of deduction for repayment of the principal amount shall be restricted to Rs. 1.5 lakhs.

Like the deduction on interest repayment, this deduction too can be claimed only after you have taken possession of the property. If you have started repaying the principal of a home loan before taking possession, this benefitwill not available to you. Also, it is to be noted that the repayments of loan taken from your friends and relatives,are not eligible for this deduction. In case you sell or transfer the residential house within five years after taking thepossession, no deduction will be made available in the year of transfer and the deductions claimed in the earlier years will be reversed and taxed in the year of such transfer.

With leading Non-Banking Financial Institutions (NBFCs) like Finserv Markets, you can avail multiple home loans at the most competitive interest rates. Minimal documentation and a hassle-free online application process are some other benefits of home loans on  Finserv Markets. So why wait? Get the best home loan deals and purchase your dream home now.

Finserv Markets, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment, and exclusive EMI store, all under one roof- anytime, anywhere!