How much exmeption i can avail on loan taken for new flat and HRA

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  1. Phani Prasad

    Phani Prasad New Member

    I have a house (bought in 2007) in Hyderabad since then I am availing exemption for principal and Interest both inclusive Rs.84000 p.a. only. (actually this was bought by my dad and they are staying there. Since he got retired in 2005, I had to take the loan (only 5.5 lakhs)). Now that I am in Bangalore and have purchased a new flat in Jan 2014 and construction is complete in April 2014. The loan taken for this is 43Lakhs and total value is 65 Lakhs (Yearly paid principal 56k and Interest 4.1 lakhs). I have let it out from June 2014 and getting a rent for it. I am staying in rented house in Bangalore and paying rent for it. Can any body suggest me how to get the maximum exemption. My idea is to show 2nd flat and declare its rent as income and avail HRA for rented house and get full interest exemption.
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    Your idea is absolutely right.

    The best way to save taxes in your case would be to show your 2nd house as rented and claim full deduction for repayment of interest and principal of home loan.

    And claim HRA deduction for the Rent that you are paying.
  3. Phani Prasad

    Phani Prasad New Member

    Thanks a lot Gaurav for the clarification. Btw, do I need to show my first house at all, just as an asset without income (as my parents are staying in it)?
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