Dear friends, We are taking a second home loan. Is there any tax return for second home loan ? one more thing, we are planning to rent the house. please lighten about this. Thanx in advance.
So you are buying a second home and you plan to rent this out. Right? The rent that you will get from this second home is taxable i.e you need to include this income in your tax return and also you are eligible to deduct any rental expenses like cleaning, maintenance, repairs, insurance for the second home etc. Unfortunately there is no deduction for loan interest. If you do not rent this property out, using it as your second home for your residential purposes, (you should actually live in this house for a period of more than 14 days or more than 10% of the days in which period the house was rented) then you can deduct the loan interest and also deduct the property taxes in your tax return.
Hi Jaya, can you kindly tell us if your suggestion is based on US tax laws or Indian tax laws? because one of my Auditor friend told we can claim full tax benefit for the entire EMI we pay for the second home loan provided we show income from this secoond proprty and pay tax for it - please clarify your reply
One question: If I take a second home loan now (for 20 years term) and the aparment cost is say 10lakhs, I take a loan for 5 Lakhs. Can I sell the apartment after 5 years ? The assumptions are that the apartment cost would have appreciated to 15 Lakhs. If I sell after 5 years, I can pay back 5 lakh loan, 10 lakhs as profit - Is it ok (or) any legal thing involved here ? I know that for 10lakh profit, I need to pay tax - apart from that would bank object to such selling ? Thanks, Rama