Hello and welcome to Part 10 of the Income Tax education series brought to you by H&R Block, the global leader in filing Income Tax Returns.
Today we will understand how you can claim interest and principal repayments as deductions from taxable income if you have bought a second home and have taken a home loan for it.
You can claim deductions under section 24 for interest repayments as well as under section 80C for principal repayments, stamp duty and registration charges. In fact you can claim the interest deduction without any limit if you are not staying in the house or have let it out. This will enable you to claim huge tax benefits.
Example: Pooja owns a house property and claims deductions for the repayment on home loan on this property. Pooja stays in this house and hence claims interest repayment deduction of up to Rs. 2,00,000 and principal repayment deduction of Rs. 50,000. She has now bought another house and taken another home loan for this house. The good news is that she can claim tax benefits even on this loan. In fact she can claim interest repayment for the entire interest amount without any limit of Rs. 2,00,000. This can be a very good tax saving opportunity for Pooja.
At H&R Block we make sure to ask such questions to you about the number of house properties owned to make sure you get all the eligible deductions.
I hope you found this useful. If you have any further questions on this topic, please feel free to ask us using #AskBlock.