IT benefits on 2nd house when 1st is self occupied and utilized for Tax benefits

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  1. PK108

    PK108 New Member

    hello Team,

    I would like to know more on below case:
    IT benefits on 2nd house when 1st is self occupied and utilized for Tax benefits;

    1. 1st house bought in 2008 (single ownership) and is self occupied in Karnataka, I have been claiming Principal and Interest deduction to the full limit as per rules (1.5 L under 80 c and 2 L against interest paid) from 2008 till now. The loan is still outstanding and expecting to claim same IT deductions for next couple of years for this house.

    2. Bought second house in Maharashtra in July 2013 (co-owned by me and spouse, spouse is house wife). I have been paying around 90 K against principal and 1.20 L as interest. Though this house is construction completed, it is neither let out nor anyone stays in, it is empty and I assume notional rent value would be close to 6k per month if I rent it out.

    My query is about, would I be able to claim any benefits in terms of IT deductions for the 2nd house? What are the recommendations / ways if I can claim any IT deductions against it?
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    Dear @PK108

    You can claim deduction for both Principal as well as Interest on Home Loan for the 2nd house.

    Moreover, as the 2nd house is not self occupied - there is no maximum limit on the interest deduction that can be claimed.

    Therefore, it is advisable for you to show the 2nd house as deemed let out and show notional rent and then you can claim deduction for principal and interest on Home Loan.
  3. PK108

    PK108 New Member

    thanks a lot Mr. Gaurav Kumar;

    Some follow on questions;
    1. Should I be getting this through the employer OR it should be while filing the return for this year? If through employer, under what section / head? Is there a separate Saral form to be considered while filing returns for this case?

    2. Do I need any specific documents like Flat completion certificate, builder's NOC, Final sale deed, Or any other, etc.. to claim these benefits

    3. I did not avail 2nd house IT benefits for previous financial year, is there anyway those can be considered in this year?

    4. Does the 2nd house IT benefits fall beyond current IT limits of 1.5 L (80 C) and 2 L (interest payment), OR both houses together come within this amount?

    Sorry about the list of questions, but I feel it would help the group with similar questions. Thank you in advance!

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