Income tax benefit to two home loans?

I have already taken a home loan from HDFC, and getting tax benefit. Now I plan to buy a second house at the same place. Will I get a tax benefit for the second house also? Can I claim the tax deduction for both houses?

2 Replies to “Income tax benefit to two home loans?”

  1. You can claim benefits on both the houses. But remember that the deduction of repayment of principle amount u/s 80C (both the houses put together) is limited to 1 lakh only.

    In case of interest, it differs.

    (1) For one house which you select as self occupied, the interest on that home loan will be eligible for deduction up to 1.5 lakhs.

    (2) In case of another house (other than self occupied), which is given on rent, you can claim full interest as deduction without any limit.

    So you can claim 80C, interest up to 1.5 lakhs on self occupied house and full interest as deduction on the another house given on rent. The net rent after deductions (rent less municipal taxes less 30% deduction for repairs less interest paid) if any, will be added to your income and you have to pay tax on it.

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