Home loans are tricky. The process of obtaining one can be tiresome, and paying off the instalments can last for years. Yet, home loans have their advantages. Especially when you have more than one. Contrary to popular belief, you can take more than one loan and can be eligible for tax benefits from them too.
The tax benefits accrued for a home loan outlined under Section 24B of the Income Tax Act specifies that for a self-occupied house the deduction allowed on payment of interest is capped at Rs 2 lakhs per year. In 2019, the government decreed that you could now claim your second house as self-occupied and avail of tax advantages. However, the interest claimed remained at a cap of Rs 2 lakhs.
Houses to rent
If you have more than two houses bought on multiple home loans that you are planning to let out, you are still eligible to claim back the municipal taxes paid for these properties along with interest paid on these loans.
Houses under construction
Buying a house under construction does not affect your EMIs, which kick in immediately. Under Section 24, you are allowed to claim tax deductions for the period of construction over a total of five equal instalments beginning from the year the property finishes construction.
A point to remember – you can only claim interest if the house continues to remain in your possession for the next five years.