In case you want to assess, analyze, and evaluate your tax claim or rebate eligibility for home loans on multiple properties, it is important to understand the taxable amount, sections, options to claim tax benefits on interest, principle, and the joint loan considerations if any.
Besides, if you own multiple properties with a few or all being purchased via home loans, there are quite a few aspects to consider, including the one related to rental income, occupied establishments, and more.
In the subsequent sections, we shall take a closer look at the diverse aspects of home loan tax benefit, precisely for multiple properties:
- Considerations related to Principal Payments
Regardless of the number of properties you own, Section 80C of the Income Tax Act allows you to get a rebate of up to 1.5 lacs on the repayment of the principal amount. However, the 1.5-lac limit is applicable to the property conglomerate and cannot be extended even if you have multiple properties at your disposal.
- Tax Rebate on Interest Paid
In case you want to save money on the total interest paid, you can consider Section 24 of the ITA for claiming rebates amounting to 2 lacs, irrespective of the number of properties you own. However, the limit exceeds up to 3 lacs for the seniors. However, if you are planning to let the property out, the interest claiming limit doesn’t exist as the same can be adjusted with the rental income. Despite the workaround related to interest claims and even the existing number of properties, you cannot get a rebate of more than 2 lacs in case the ‘Letting Out’ Venture starts incurring losses.
- Pre-construction Interest
If you have multiple properties on loan with pending constructions, you can still get a sizable tax debate for the EMIs paid before the establishments get handed over to you. The total incurred interest, however, can only be claimed as 5 equal and separate claims. Moreover, even in this case, there is a 2 lac cap on the home loan tax benefit. Your calculations are made using a house loan calculator, you can easily evaluate the interest, payment, and even the overheads.
- Considerations for Registration Charges
For individuals interested in purchasing properties, even the stamp duties or registration charges can be claimed as a part of the tax rebate scheme. Then again, you need to consider the 1.5 lac cap and the same year expense factor into account.
- Deduction and Rebate under 80EEA
The budget of 2019 also accounts for a rebate of up to 1.5 lacs under 80EEA, applicable for properties with stamp value equal to or lower than 45 lacs. However, this form of tax rebate is also applicable to either of the purchased properties.
- Joint Home loan tax rebate
To enjoy tax claim benefits for joint loans, the number of properties does not come under consideration. However, the co-borrower and co-owner can enjoy separate benefits, as per the mentioned sections.
Depending on the number of properties and calculations made using a house loan calculator, you can easily evaluate the interest, payment, and even the overheads. This would eventually make it easier to analyze tax rebates, either yearly or across the entire loan tenure.
