The article gives tax saving tips to those planning to buy a second home or already own a second home. Every property related transaction comes under the purview of income tax. This means purchasing, owning and selling a property is taxable.
The article says that if you take a home loan for the purchase of second home then, you become eligible for availing tax benefit under section 80C.
According to Vaibhav Sankla, Managing Director, H&R Block India, it is better to take a loan for the purchase of a second home as home loans are usually cheaper than any other type of loan plus you get a full tax benefit on the interest payable.
Opting for Co-ownership is also beneficial as co-owners can avail tax benefits separately.
Claiming housing loan deductions as well as house rent allowance at the same time in a particular financial year can land you in trouble. You can claim both but, under certain conditions. The article clearly mentions those conditions.
Vaibhav explains in the article how you can use rent as a tool for your tax deductions because rent from the property is treated as income.
Apart from this, Vaibhav adds that for at least for the first six-seven years the total of all deductions would be far higher than the amount of rental income. Thus, the loss incurred can be offset against other taxable income such as salary.
The article also points out scenarios where you cannot avail the tax benefits for a second home.
Source : 99acres