Income Tax Deduction for 2nd house on Loan

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  1. Sanjay Manikchand

    Sanjay Manikchand New Member

    Dear Sir,

    I seek your advices on following income tax related topics.

    1) I have purchased a house during 2004 at Mumbai & is self occupied. There is no co- owner in this property. My self is Paying EMI to the bank & claiming the principal and interest component to avail income tax rebate.

    2) My son is doing the Job at Banglor & has purchased a house at Pune during 2013 in which I am the co-owner & we both are paying EMI to bank against the loan availed. In total EMI my share is 57% & balance 43 % share of my son.

    3) My son likely to get the possession of house at Pune in the year Feb 2015.

    4) As soon as we get possession of house at Pune, it will be occupied by my son family & he will claim the tax rebate stating as self occupied ( By his family). It is his first house.

    5) As I am the co-owner in the house purchased by my son, I will like to know whether Pune house to be treated as second house in my Income tax Return.

    6) If it will be my second house, then please highlight on the calculations on interest component & principle component to avail me income tax rebates.

    7) Can I show Pune house as let out property to my son and avail IT rebate.

    I hope you may kindly reply to my queries.


    Sanjay Manikchand
  2. rudrabose

    rudrabose Active Member

    Dear Sanjay

    1. You can show this property as let-out to your son. In this case, as the property is let out, you can claim deduction for interest without the limit of Rs. 2 Lakh as limit of Rs. 2 Lakh is only for Self Occupied Property and there is no maximum limit for let out Residential Property

    2. As your son would be paying you the Rent, he can also claim exemption from House Rent Allowance.

    Feel free to ask in case of any other queries.
  3. Sanjay Manikchand

    Sanjay Manikchand New Member

    Dear Rudra Bose

    Thanks for reply.

    My son is co-owner in my second house property, & if he is paying rent to me in proportion of my share in the property can he he claim interest for rebate as self occupied( his first property)
  4. rudrabose

    rudrabose Active Member

    Yes, your son can pay you Rent for your proportionate share and claim HRA for this Rent paid.

    For his share in the property, he can claim deduction for payment of Interest under Section 24 and also deduction for payment of principal under Section 80C
  5. Sanjay Manikchand

    Sanjay Manikchand New Member

    Dear Rudra Bose

    Thanks for reply

    One more query

    My son is doing job at Banglore & living their on rent. His family is residing at Pune house. Is the property can be treated as Self Occupied. Can he claim both HRA & deduction for payment of interest under section 24


  6. rudrabose

    rudrabose Active Member

    Yes, it is allowed.

    You can claim HRA for House in Pune and Rent for house in pune as well as bangalore.
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