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I have purchased one house property at Bhopal. which is constructed. For which I paid Rs. 280800/ pre EMI interest & Rs. 260000/ EMI interest. I purchase another house property in Gurgaon. It is under construction. So how much benefit can I claim U/S 24 of Income Tax.

  • Income tax on property that you have purchased (possibly subject to a mortgage)? Why is the value of the property being taxed as income to you? Or is it Wealth Tax (which is assessed on wealth, that is, assets, that concerns you? – Dilip Sarwate Aug 12 '14 at 13:51
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In the long run, think of your second house as a simple P&L account. There are no special benefits. In a way it can be a good thing initially since you pay a lot in interest and every rupee can be treated as an expense against any revenue (rental).

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You haven't mentioned the dates when you took the possession of the house. Assuming this to be in the current financial year, i.e. April 2014 to Mar 2015; you can claim a rebated of Rs 2,00,000/- on the interest. The pre-emi interest is to be amortized at 20% for 5 years. So for the current year, your total interest paid will be 2,60,000 + 1,80,800/5 = 2,96,160. However the Maximum rebate on the first house is Rs 2,00,000. Hence you don't get any additional benefit of the pre-emi interest.

Say in the 5th year [or any years before 5th], your normal EMI interest is 1,50,000. Then your total EMI interest would be 1,50,000 + 1,80,800/5 = 1,86,160. Provided the rebate remains at 2,00,000 you can claim the entire amount.

For the second house, there is no rebate of pre-emi Interest. There is unlimited interest rebate once you take the possession of the house and pay regular EMI's

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