Firstly it would like to Thank You for all the posts on this blog.. They are informative and are very helpful .
I have a question regarding the 2nd Home Loan benefits which can be claimed for the income tax from this Financial Year onward. I know prior to FY2017-2108, The interest claimed on the second house loan had no limits provided the property was rented out and rental income was considered.
However this changed from FY2017-2018 as per the Budget announced and now the interest claim comes with a cap of maximum 2 Lacs Rs.
There is some confusion over this and more and more I try to search and read i get various answers.
The income tax does not have this rule amended yet nor is it listed..
My question is :
The limit of this interest cap which is max 2 lacs is it inclusive of the first loan that is both the loans considered together?
The 2nd house loan interest claim of 2 Lacs is over and above the first House loan?
I would appreciate if you can throw some light and clarify on this..
You confused between Sec.24 of IT act which applies for interest benefit for the self-occupied property with set-off of losses for second property or let out property.
First, let me clear the doubts about a second property.
Earlier if an individual has a second house and is earning a rental income of Rs.1 lakh per annum and Rs.6 lakh is the interest outgo on the housing loan, then such Rs.5 lakh is considered as loss of income. Such loss can be set off to the fullest within same year i.e. he can set off the loss against any of his income for Rs.5 lakh.
However, now the maximum limit is set is Rs.2 lakh per year. But such remaining losses can be carry forward and set-off up to 8 years with yearly limit of Rs.2 lakh.
So this is set-off rules, which in no way related to Sec.24 IT act on interest payout on your first property.
Hope I cleared your doubt.
Thanks Basavaraj !
Yes that answers the question regarding the second housing loan interest.
I had these same thoughts, however my company finance guys are not ready to consider this.
They are saying the max limit of interest outgo together for First House and Second House is 2 Lakhs,
I am not sure how should i explain this to them.
So Sec.24 IT act only talks of Interest Payout from the first house right?
Which section does this second house related interest outgo considered as loss fall in ?
Can you help me in pointing out any document/link from the official income-tax site or something like that?
“So Sec.24 IT act only talks of Interest Payout from the first house right?”-YES.
Regarding the second house, refer this IT tutor and concentrate on Sec.70, 71, and 71B. But I think this is not updated. Now the limit is Rs.2,00,000 ONLY.
Did you miss out providing the link to IT Tutor?
Is this tutorial (http://www.incometaxindia.gov.in/Tutorials/Income-from-House-Property-Practical.pdf) you are talking about .?