Tax treatment on the interest paid on the second house loan when first one is fully paid off ?

POSTED BY sathisp ON February 10, 2014 11:20 am COMMENTS (2)

Hi,

I paid off my first house loan few years back and now am planning to buy another house. Note that I don’t have any home loan at the moment. I am planning to buy another house and would be taking a huge loan (thanks to appreciation in real estate) to support the purchase.  I will continue to stay in my old house and planning to let out the new house.  I read that it does not have any limit on interest paid (so entire interest amount will be exempted) unlike first loan, but principle paid is not exempted under 80C. Can any one advise what will be the tax treatment on the interest paid on the second house loan.

Thanks in advance,

Sathish

2 replies on this article “Tax treatment on the interest paid on the second house loan when first one is fully paid off ?”

  1. Credexpert says:

    Dear Sathish,

    Yes, in case of loan taken for second house which is let out and which earns you rental income, under section 24 of the Income Tax Act you would be eligible for deduction on the interest paid without any cap of 1.5 lakhs.

    Regards,
    Credexpert
    http://www.credexpert.in

  2. ashalanshu says:

    Dear Sathish, principal repayment for home loan is eligible for section 80C benefit. No matter it’s your 1st house or 10th or 15th. Regarding interest, yes if you are earning and declaring the rental income from 2nd house, income ‘ll be added but full interest ‘ll be available for set off with out any limit.

    For betterunderstanding, please read previous discusions here in the forum.

    Thanks

    Ashal

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