{"id":3454,"date":"2022-02-01T16:40:09","date_gmt":"2022-02-01T11:10:09","guid":{"rendered":"https:\/\/homefirstindia.com\/?post_type=article&p=3454"},"modified":"2025-02-05T09:52:03","modified_gmt":"2025-02-05T09:52:03","slug":"tax-benefits-on-second-home-loan","status":"publish","type":"article","link":"https:\/\/homefirstindia.com\/kn\/blog\/article\/tax-benefits-on-second-home-loan\/","title":{"rendered":"Tax Benefits on Second Home Loan"},"content":{"rendered":"

\"Home<\/p>\n

Have you considered purchasing a second home? A house is more than just a place to live. We should treat our home with the respect it deserves as a treasured asset. And if you have the means to invest in a second asset, you should! Before investing in a home, you’ll need to tackle other crucial decisions. You’ve already been making EMI payments on your present house. Will you be able to obtain a second mortgage as easily? Consider getting a second home loan<\/strong><\/a>, which will not only provide you with a more comfortable living space but will also save you money on taxes.<\/p>\n

With an example, let us learn more about the tax treatment of a second home loan.<\/strong><\/h3>\n

Assume Mr. Singh, a 38-year-old businessman, owns one house in Pune for which he pays EMIs (Equated Monthly Instalments). He is now planning to relocate to Delhi in search of better business possibilities. As a result, Mr. Singh rents out his home in Pune to finance the EMI. And, instead of renting, he decides to buy a new home in Delhi.<\/p>\n

Is Mr. Singh now qualified for a second house loan? Is he eligible for a second house tax credit?<\/p>\n

Mr. Singh can, in fact, take out a second mortgage and receive a tax deduction for it.<\/p>\n

Here’s how you can get a tax break on your second mortgage:<\/strong><\/p>\n

Section 80C: Under Section 80C, you can claim a deduction on the principal amount up to Rs. 1.5 lakh. This deduction can be claimed on many properties, regardless of whether they are self-occupied or rented out.<\/p>\n

Clause 24(b): Under this section, you can deduct interest payments up to a maximum of Rs. 2 lakhs.<\/p>\n

There are two possibilities here:<\/strong><\/p>\n

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  1. Both residences are self-occupied: According to the most recent budget provisions, the second property cannot be considered rent. As a result, both properties will be considered self-occupied. The total interest paid on both residences should be less than Rs. 2 lakhs.<\/li>\n
  2. Self-occupied first home rented second home: From your second residence, you earn rental income that needs to be declared. You can deduct a typical 30 percent interest on a home loan and municipal taxes from that. You can deduct up to Rs. 2 lakhs from your other sources of income.<\/li>\n<\/ol>\n