Second House Home Loan : What Points to be Noted?

 By Mr.Satheesh Kumar, Auditor, Chennai

In India, real estate plays major role, more particularly in Tamil Nadu. Everyone is in need of house , without house, no one can stay permanently any rental house.

Nowadays both husband and wife are earning. If we have an amount of Rs. 5 lakh in hand we can avail Rs. 25 lakh as housing loan from any nationalized banks or HFCs (Housing finance companies). So totally we can purchase house with the cost of Rs. 30 lakh after 3 to 4 years that property value would be doubled We are seeing that it is happening for the past more than 20 years.

Husband and Wife Can Claim Interest..!

Mr.Satheesh Kumar

Hope this would continue your repayment would be around Rs. 25,000 only . If both husband and wife are earning jointly per month Rs. 50.000 they are eligible for Rs. 25 lakh housing loan and their repayment would be. Rs 25000 p.m.

Both can claim interest to the extent of Rs. 1.50 lakh per person .And they can repay for their housing loan any surplus funds also, so that they can claim Rs. 1. lakh each as their principal repayment.

Instead of investing other investments for claiming 80-c rebate, they can repay their housing  loan to the extent of Rs.1 lakh each as their principal amount, if they have surplus funds. Otherwise interest & principal can be claimed equally by them as per their EMI.

However if any repair work is being done they can claim only Rs. 30.000 per year as interest exemption if they borrowed for the purpose of repair. If a person can not occupy the house due to the fact that owing to his employment, business or profession carried on other place, in that case also annual value will be nil. No tax will be charged for notional rent.

           

If house is being purchased along with wife, father, mother, brothers. In such cases if their respective shares are definite, and ascertainable, each persons income has to be ascertained separately and interest, principal can be claimed individually with equal shares. It need not be assessed as AOP.

Second Home Loan..!

If  husband and wife are having Rs. 1. lakh per month as their joint income. They can go for second house in home loan. For that also they can avail housing loan from banks or HFCs. But some banks , they are charging additional (extra) 1 per cent interest for second house , before borrowing housing loan , it is advisable to compare the interest rates .

For income tax purpose, any interest amount can be claimed along with municipal tax and 30% for repairs and maintenance , if property is let out. Principal amount is also eligible to the extent of maximum Rs. 1. lakh U/s 80 – C. 

But it is advisable to let out second house otherwise , wealth tax will come. Interest amount and municipal tax payment can not be claimed. Interest on interest is not deductible , because of the failure to pay the interest on the due date .

Investment in House Property..!     

Instead of waiting for purchase of big house, one small house can be purchased within your income budget. Then after three years one big house can be purchased out of our sale proceeds of small house and available savings, and can borrow extra up to our eligible limit. So that property can be appreciated multi fold.

Investment in house property out of sale proceeds of house property is not taxable as capital gain provided if we are holding the house for more than three years.

If we compare the interest payment with our income tax exemption for interest and principal amount and appreciation of property value is concerned, interest payment is negligible .But repayment should be property, this can not be done as speculation purpose. If we do speculation business in housing we have to face lot of problem along with loss.

Contact:

Mr. S. Satheesh Kumar, Bsc, FCA,

Company Name: S. Satheesh Kumar & Co.,

Office: Flat Number AF2, Anirutha Apartments,

New Number 805, Velachery Main Raod,

Camp Raod Junction, 

Selaiyur, Chennai - 600 073

Ph: 044 - 2227 6611

Mobile: 95000 06521, 94443 85844

Email: satheesh_ss@bsnl.in

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