Is Tax exemption possible for second Housing Loan?

Sir, I bought a flat in 2003 by taking a housing loan from ICICI. Though the loan tenure was for 20 years, but I foreclosed it in 2008. During the loan period (i.e. 2003-2008) I availed tax exemption on both the “Principal” and “Interest” components. Now I am selling out my flat and going to buy a new flat with a new housing loan from SBI. My question is : (1) Can I avail tax emption on my new/second loan ? (2) I have studied different articles but none of them properly addressed it. Some says, exemption can be availed only on the rent portion of the second house. What does it mean ? (3) I once again like to say that I am buying this new/second flat only after disposing my earlier/first flat. Then which clause would be applicable for my case ? Thanx & regards,

Rahat

asked Aug 23 '11 at 15:20 by Rahat 1222


  1. You can avail tax exemption on second house/home loan too. If it will be self-occupied, you can claim interest exemption upto 1.5 lacs per year and principal amount upto 1 lac (under 80-C combined limit).
  2. In case the house is given on rent and you show rental income in your taxable income, then you can claim whole interest paid (with no max limit of 1.5 lacs).

answered Aug 24 '11 at 18:22 by pankaj 5.2k320

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Thank you Sir.
(Aug 25 '11 at 11:36) Rahat

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Asked: Aug 23 '11 at 15:20

Seen: 2,464 times

Last updated: Aug 25 '11 at 17:24