### Two Home Loans

POSTED BY ON March 6, 2013 11:35 am COMMENTS (10)

Hello Sir,

i brought 1 home in 2006 and i am claiming Home loan for that.

in 2012 i and my wife brought 2nd home both are co owners and co applicants. we are planning to occupy the 2nd home this may. 1st home will be given for rent.

can you please suggest the benefits and tax implications.

Thanks,

Sridhar

1. Dear Sridhar, if you can earn more than what you are paying as interest in your home loan, it’s good idea to continue with these loans & let your money earn for you. Even if you close the 1st house loan, the rental income ‘ll be added to your income & then it ‘ll be more tax on you as no more help of tax benefit from home loan interest. if you opt to preclose the 2nd home loan, again it’s a double blow. Your own benefit as well as your wife’s benefit ‘ll be gone forever. think over it.

thanks

Ashal

2. sridhar says:

Thanks Ashal.

Finally i have 1 Q.

if i close any one loan, then how the tax works. is it good idea to close the home loan before the tenure in my case. (2 home loans)

if i have money is it good idea to close. if so closing loan with less principle or loan with more principle is good.

Thanks a lot for your help.

3. Dear Sridhar, here I’m trying to calculating your tax benefit.

Property 1 – On rent
A. Gross yly rent = 13000*12 = 156000
B. Property tax paid to municipal authorities = 2500
C. Net rent received = A – B = 153500
D. Standard deduction @ 30% of C = 46050
E. Interest paid on home loan = 170000
F. Income from house property = C – (D+E) = 153500 – (46050+170000) = – 62550

Property 2 – self occupied
Interest paid for home loan = 150000

Income from house property = Property 1 + Property 2 = -62550-150000 = -212550

So the total loss as calculated above ‘ll be available for set off from your salary income.

Thanks

Ashal

4. Dear Sridhar, what’s the yly property Tax you are paying to local municipal authorities.

thanks

Ashal

1. sridhar says:

Hi Ashal,

Sridhar

5. Dear Sridhar, What ‘ll be the rental income from the 1st house?

thanks

Ashal

1. sridhar says:

Hi Ashal,

it will be 13k per month.

thanks,
sridhar

6. Dear Sridhar, as the 2nd home ‘ll be co-onwer & basic residential unit, the home loan benefit ‘ll be available to both of you on this. Both of you can claim the interest benefit for each upto 1.5L Rs. i.e. 1.5+1.5 =3L

Similarly principal repayment benefit for each of you.

The first house’s rental income ‘ll be added to your income but full interest ‘ll be available for tax benefit with out any limit. From your rental income you can claim standard deduction of 30% towards upkeep & maint. of your house, no matter you actually spend that much amount or not.

Thanks

Ashal

1. sridhar says:

1. sridhar says:

Hi Ashal,

i have one doubt.

as your said i can claim principle and interest 50-50 from 2nd home loan.

you also mentioned i can claim full interest on the 1st homeloan. how is it possible to claim both. please clarify.

can i claim both the interest for ex. 1st loan int is 170000; 2nd loan int 150000, then it will become 320000.