Folks are generally under the impression that one can own any number of properties but one cannot take more than one home loan at a time. This is simply not true. As there is no restriction on the number of properties to own, there is also no restriction on the number of properties for which you will take home loans and state tax benefits. The amount of home loan that you can take, for all the properties used together, shall rely upon your earning and your potential to service the loan.
Tax benefit on interest payment
You are able to claim discount for interest payable on a loan, taken for purchase, construction, repair, or renovation of any property under Section 24b. In the event you happen to own only one residential house property which is filled by you, the maximum deduction that can be claimed on interest repayment on a loan for the property, is restricted to Rs 2 lakhs every annum. However, in circumstance the money is lent after 1st April 99 and construction of the property is not completed within a period of five years from the end of the financial year in which the money was borrowed, the deduction in respect of the interest claim will probably be restricted to Rs 35, 000 only.
In circumstance you have let away any property or properties owned by you, you can claim deduction for the complete interest paid, without the upper ceiling against the rent received in esteem of each such property. However, in case you own multiple house property and more than one houses are occupied by you, then, you have to choose anyone property as self-occupied and the other property/properties are cared for as let-out which is why a notional rental income, structured on the rent the house is expected to fetch, is necessary to be offered for taxation. So, once any such property is treated as let-out, you can state the tax benefits for full interest paid, for money borrowed in admiration of any of the property that is cared for as let-out.
This deductions on interest payment is available, for any commercial or residential property possessed by you. It is also available, irrespective of whether the amount of money is borrowed from a bank or casing company, or from friends or relatives, with regards to fixes, purchase construction, reconstruction, and so on.
Any interest paid during the construction period can be amortised and can be claimed in five equal instalments, beginning from the year when the structure is completed and own the house is used. – source
Tax benefit on repayment of principal
As every the provisions of Section 80C, you can declare up to Rs one particular. 5 lakhs for repayment of housing loan used from specified institutions, including cost of registration and stamp duty of a residential house. Although you can take home lending options for over one property, the amount of discount shall be restricted to Rs 1 ) 5 lakhs. The overall amount of deduction, includes other items like provident pay for contribution, life insurance high quality, tuition fees, PPF contributions, NSC, ELSS, etc.
This kind of deduction can be said only once you have taken property of the property. For those who have started repaying the main of your home loan before taking possession, this advantage is unavailable to you. Please note that repayment schedules of loan taken from your friends and family, are not eligible for this deduction.