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RM Reports

How to get tax benefits on multiple homes? – RealtyMyths

by Anushree Ghosh

Claim tax benefits on multiple properties

An introduction to the fact that you can apply for loans on more than one property, tax benefit on monthly interest, benefits of first time purchase, tax deduction on the principal amount, the proposition for multiple home loans in interim budget 2019

Looking for the best investment opportunity?

Real estate is your best bet— share market is volatile with frequent ups and downs but real estate seems to be the right opportunity with higher returns and secure promises. But, if you are worried that you already own a property and the investment on the second one feels a lot on your financial plate, then there are many reasons to give your second property a second thought. Most people are under the impression that you cannot apply for more than one home loan, but there is no limit to the number of houses you want to buy with home loans, and you can claim tax benefits also, depending on certain criteria.

However, the cumulative loan amount that you’ll be needing to pay for all your properties will depend on factors like income, age, credit score and your ability to repay the loan. Tax benefits on the monthly interest can be availed on the basis of the amount borrowed for rebuilding or constructing the property. The assessee can claim LTCG exemption under Section 54 or 54 F.For reference, there has been an amendment after the “Gita Duggal” -in the term ‘a residential house’, the letter ‘a’ should not be considered an indicator of a single property. Consequently, investors could then claim the exemption in more than one property. However, as modified on 1st April 2015, ‘a residential house’ was replaced by ‘one residential house, therefore, currently, you can claim the exemptions by investing in one property only.

Additional deduction up to Rs 50,000 can be claimed under Section 80EE if you are a first-time purchaser. But, to claim the benefit, the loan amount should be between 30 – 50 lakhs.

Tax Benefit on Principal Amount

Under Section 80C you are entitled to get a repayment benefit up to 1.5 lakhs for residential home loans – including the stamp duty and registration charges. The total exemption you can get also depends on other contributions such as provident fund, insurance & tuition fees. For availing the tax benefit you must hold the possession of the property for at least 5 years, starting from the end of the year in which you bought it. The claim can be made only after you start paying the EMIs.

Provisions for multiple homes owners in budget 2019

The interim budget 2019 proposed that if you own two properties then both of them will be considered self-occupied, whereas, only one is currently allowed, but the proposed deduction in tax still remains the same.

Anushree is a versatile writer, theater actress with an immense passion for any form of art. Her blogs will take you through the different horizons of infracultural storie.

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