Multiple House Loan Tax Benefit

POSTED BY Subendu ON January 2, 2012 10:25 pm COMMENTS (9)

am staying at my parents place and claiming the HRA (company provides Rs. 12500 PM) , parents show that in their other income and pay tax. We got overall benefit on tax slab as i am with 30% slab and my parents on 10%. House on their name and they have built it.

I have invested/planned to purchase 3 house. 2 are in same city and 1 in different.

House 1 : interest pay per annum is 1,54,692.00 (12,891 pm). Located in same city (outskirts of city) , but in near future BDA palnned to expand to those area also.
House 2 : interest pay per annum is 1,69,596.00 (14,133 pm). Located in same city (outskirts of city) , but in near future BDA palnned to expand to those area also.
House 3 : interest pay per annum is 1,05,996.00 (8,833 pm). Located in different city.

Please explain me how to save maximum tax on principal and interest on above property and also from HRA.

9 replies on this article “Multiple House Loan Tax Benefit”

  1. Vissu says:


    I need advice for the below query :

    I recently purchased a house(on loan) in my home town and my job location is in another city where i have existing flat which is on loan too. But this flat i have given on rent as its far to commute to my job location.

    So my situation is this :

    1. Home town – Self occupied as my parents live there.
    2. Job city flat – Given on Rent.
    3. I live in rented flat. ( same as job city )

    So my question is can i show my home town property as SOP and Job city as LOP and claim HRA all together ?

    Can we claim two properties as LOP(will show notional rent) and claim HRA also ?

    And what are the wealth tax implications of owning multiple properties ?

    Please kindly advice me , i am great follower of this blog.

  2. Muthu says:

    Even if the self occupied house (It should not be let out and you should not receive rent for it. i.e., to say you can have your parents stay over there and don’t get any income from it) is in the same city. Both benefits can be claimed.
    But you have to consider the Notional Rental income .

  3. KK Babu says:

    OK. Its great to know the same. I know many friends in my previous orgnaisation who are not availing this benefit. Surprisingly, some of them have accounts background (

    This forum is great. It is really helping people.

    Regards, KK Babu

  4. Dear KK Babu, Yes is the answer. Even if the self occupied house is in the same city. Even then you may claim both benefits.



  5. Dear KK Babu, Yes is the answer. The person in question may claim both benefits. HRA as well as home loan benefits on a self occupied house. For other 2 rented properties for the given query, I already clarified.

    In the above discussion, the self occupied house is/’ll be in other city. Hence claiming HRA as well as home loan for self occupied house is available with a ease.

    FYI – I had availed the same in the past for myself from my employer. Claiming HRA in Gujarat & home loan in UP self occupied house.



    1. KK Babu says:

      Dear Ashal ji

      Thanks for your clarification. My intention of asking the question is:

      Can anybody claim both HRA and loan benefit on self occupied house (both being in the same city).

      Regards, KK Babu

  6. Dear Subendu, In general, the least interest house should be declared on rent. Please do note the principal repayment in all the three loan together is available for tax benefit under section 80C within the over all limit of 1L Rs. Here I’m giving you an example to calculate the tax benefit on rented property.

    A. Yly Rental income from the property 1 = 62000
    B. Property tax paid to local municipal authorities = 2000
    C. net yly renatl income = A – B = 60000
    D. Standard deduction for rented property @ 30% of C = 18000
    E. Interest paid on home loan = 154000
    F. Income from house property = C – (D + E) = -112000

    As F above is a loss, it ‘ll be available set off first against your other house property income & then to salary.

    So for your own case, a hypothetical answer ‘ll be like this –

    1. Property 1 = rented property, based upon the calculation as given in the example above 2. Property 2 = same as property 1 calculated above
    3. Property 3 = self occupied hence full 1.05L Rs. interest set off

    The sum of all the 3 above ‘ll be a loss & available for set off against salary income.



  7. The general notion is that you need to rent and own in different cities to claim HRA and Home Loan benefits. Not really.

    In your case continue to claim HRA.

    Of the three houses one house is self occupied (here the maximum eligible interest payment is 150,000).
    For the two others, whether you rent them out or not, you need to pay tax on notional income but the interest payment has no limits.

    Going by this I would make the House 3 as self occupied, Interest = 1.05 Lacs and the other 2 as rented ones and claim full interest payment for deduction. Also note that upto 30% of the actual/notional rent received can be deducted from your income.

    The above decision is just based on the outstanding interest at this point in time. When you do the actual math it may happen so that the notional rent received may be significantly higher for House 1 or House 2 making unviable as ‘let out property’ (If you receive actual rent then you have no choice, btw!).

    My reco is based on rule of the thumb but it boils down to notional rent calculations actually!

    1. KK Babu says:

      Dear Justgrowmoney

      Do you mean to say, Mr. Subendu can continue claim HRA, even after declaring any one house of the above 3 are declared as self occupied?

      Kindly clarify.
      Regards, KK Babu

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