Tax implications/benefits on 2nd home

Haresh N R (Querist) 15 March 2014 This query is : Resolved
I have a flat in Mumbai which is self-occupied and on home loan.

I am interested in purchasing a 2nd flat outside Mumbai on home loan and also intend to give it on rent.

What are the tax implications/benefits for the same?

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R.V.RAO (Expert) 15 March 2014
on self occupied flat, you need to declare annual let out value as zero,and you can claim deduction of annual taxes, and int.on home loan( for self occu.property. max. Rs.1.5 lacs P.A)) .the negative value say zero minus int.on borrowal etc.. can be set off against your salary income if u r wage earner.

as for 2 nd flat you need to declare as let out and from annual rent/notional let out value claim deductions of property taxes,30%deduction towards repairs and also int.on home loan (unlimited on let out property home loan).negative balance can also be claimed and set off against salary income.
benefits are appreciation and rental income addition and saving of rent on self occu.prop.

R.V.RAO (Expert) 15 March 2014
the principal home loan payment also gets you annual tax saving upto rs one lakh.(this one lakh includes other exemptions like lic prem,school fees,nsc,POTD ETC..
this is one more tax benefit,for buying property.