Tax saving for Second house home loan where first house loan is closed.

Hi, I took home loan 3 years back and bought a house in my home town. I have prepaid the loan and closed it now. Now if I buy a second home in a different city, what are the tax exemptions I could avail of? 1. Will interest exemption limit be there or will it be no limit ? 2. Both houses are for self-occupation, but as I understand I have to show one as 'deemed rental income'. Can I have choice in choosing which house to show for this?

Thanks for help in advance.

asked Mar 26 '15 at 21:18 by Phani R 221●6●7●13

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As you own two houses, one has to be shown as self occupied and other on rent. If its not put rent, a notional rent would need to be added to income. If you consider new house on rent and show rental income on it, there won't be limit on exemption on home loan interest.
Yes, you can choose any one as self occupied and other on rent. But IT department may raise questions in case your self occupied house is not in same city (or at a commutable distance) where you work.

answered Mar 29 '15 at 22:22 by Pankaj Batra 5.2k●3●20

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Asked: Mar 26 '15 at 21:18

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Last updated: Mar 29 '15 at 22:22

Tax saving for Second house home loan where first house loan is closed.

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