SECOND HOME LOAN - Can IT deduction be availed for it ?


I am a salaried person working in a government department. I file my IT return regularly and I have my PAN No. also. Sir, I would like to request you to kindly go through the two cases, mentioned below and please enlighten me with your valuable advices.

CASE - I I purchased a flat in 2003 by taking a Home Loan from ICICI Bank. I repaid & foreclosed the home loan in 2009. From 2003 to 2009, I availed Income Tax Deduction on this Loan (i.e. both on Interest & Principal components).

CASE - II I purchased a SECOND flat on 28.09.2011 (Date of Registration) by taking another home loan; this time from SBI. And I SOLD my earlier flat on 14.10.2011 (Date of Registration).

Now, Sir, I would like to know : (1) Can I avail Income Tax Deduction on this SECOND HOME LOAN ? (2) If yes, will it be just like the earlier one [Like both on Interest and Principal component] ? (3) I purchased the new flat for Rs.18,25,000/- (excluding Stamp duty, registration fees etc.) and sold my earlier flat for Rs.14,85,000/- (excluding Stamp duty, registration fees etc.). Is there any CAPITAL GAINS TAX, to be payable ? (Deed value of my earlier flat is/was Rs.4,00,000/-)

Thank you, Rajib

asked Nov 16 '11 at 11:03 by Rajib R 1469

  1. You can avail income tax deduction on interest and principal paid towards second home loan too.
  2. It will be like earlier one too.
  3. As you purchased a new flat within one year before sale of old one, with cost more than gains, there won't be any income tax liability from sale of old flat, u/s 54.

answered Nov 17 '11 at 00:02 by Pankaj Batra 5.2k320

Thank you very much Sir. It is indeed a valuable advice that will help me a lot. Rajib
(Nov 17 '11 at 11:25) Rajib R

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Asked: Nov 16 '11 at 11:03

Seen: 2,492 times

Last updated: Nov 17 '11 at 11:25