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From FY 19-20 onwards in the Finance Act, 2019, government has allowed a major relief u/s 23 and 24 of the Income Tax Act, 1961 by allowing the taxpayers to declare in their tax return the value of their ‘Two’ houses as self –occupied, on a NIL basis. That means, now a person can enjoy the benefit of “NO TAX” in respect of his two owned house properties.

Now let us understand the impact and its benefits that we can claim if we have obtained any loan for the acquisition / construction of the second house property:

Under Section 24 of the Income Tax Act, 1961, vide Finance Act, 2019, an amendment has been incorporated “the aggregate of the amount of deduction” so as to include the payment of an interest made by a person w.r.t his/her owned house properties.

Let us understand the above amended section 24 of the Income Tax Act, 1961 though a below mentioned table:

Maximum deduction on Interest on borrowed capital In respect of Let out House property Actual interest paid shall be allowed as a deduction subject to the set off limit of maximum Rs. 2 lacs and balance loss shall be carried forward.
For self- occupied House property in respect of capital borrowed for an “Acquisition or construction” of a house property Maximum deduction of Rs, 2 lacs is allowable. However, in respect of a constructed house, its construction should have been completed within 5 years from the end of the FY in which capital was borrowed.
For self- occupied House property in respect of capital borrowed for “Reconstruction, repairs or renewals” of a house property or either its construction not completed within 5 years from the end of the FY in which capital was borrowed Maximum allowable deduction would be Rs. 30,000/-

Note: Any interest pertaining to the period prior to the year of acquisition/ construction of the house property shall be allowed as deduction in five equal instalments, beginning with the year in which the property was acquired/ constructed.

Apart from the above mentioned interest benefit deduction; additional benefits are also there for a loan taken by a taxpayer for his /her house property. Let us also understand the same though a table given hereby below:

Section Type of deduction Conditions and Limits
Section 80C Principal repayment of loan taken for residential house property Maximum Rs. 1,50,000/- on a payment basis with a lock in period of 5 years
Section 80EE Interest repayment of loan taken for residential house property Maximum Rs, 50,000/- followed by a given condition-

a) Loan sanctioned period is between 01.04.2016 to 31.03.2017

b) Amount of loan does not exceed Rs. 35 lacs

c) Value of a house property does not exceed Rs. 50 lacs

d) Assesse does not own any residential house property on the date of sanction of loan.

Section 80EEA Interest repayment of loan taken for residential house property Maximum Rs, 1,50,000/- followed by a given condition-

a) Loan sanctioned period is between 01.04.2019 to 31.03.2021

b) Stamp duty value of a house property does not exceed Rs. 45 lacs

c) Assesse does not own any residential house property on the date of sanction of loan.

Note: The above tax deductions are per person and not per property. So in case of joint ownership in house properties, each person repaying the amount would be eligible to claim whole deduction separately subject to the actual payment incurred in relation to an interest and Principal.

Note: For claiming the above tax deductions, interest certificate with proper bifurcation of the Principal and Interest paid in the financial year will be required along with the loan sanction letter.

Author Bio

CA Ila Jindal is a Chartered Accountant (proprietor of Jindal Ila & Co.) having an experience of over 10 years in Direct taxation, Indirect taxation, corporate matters and accounting of businesses. She is a qualified diploma holder of DIIT (ICAI) with AIR-2 qualified in the year 2023. DIIT stan View Full Profile

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  1. Pawan Agarwal says:

    I am owning jointly with my wife a residential house in one city on which home loan is there. In this house my brother with his family is residing and I am claiming interest and Principal repayment benefits in Income Tax. I am also claiming HRA benefit in Income Tax due to my employment in another city I am not claiming any money in form of rent etc from my brother.

    Now I have got constructed another house jointly in myself and wife’s name in the city of my employment.

    Can I and my wife claim interest and Principal repayment benefit for both houses in Income Tax?
    Also, Can I claim HRA benefit also in Income Tax?

    Please suggest

    1. CA Ila Jindal says:

      1. You cannot claim HRA exemption if you own a house in the same city of employment except if you have valid reasons for not living there.
      2. You can claim the benefit of home loan interest and deduction in respect to the second house also. In case the house is self occupied, max int deduction including first house will be Rs. 2 lacs subject to actual repayment of interest and balance interest beyond Rs. 2 lacs will be a dead loss. However, in case the house is rented one, you can set off upto Rs. 2 lacs and balance interest can be c/f as loss from House property and can get set off in future years against income from house property only.

      1. PAWAN AGARWAL says:

        Thanks ILa Jindal,
        Please also clarify whether I can claim 80C deduction also against principal repayment for both the houses?


  2. Rohit Walke says:

    I am having second home loan of 1.2Cr from Bajaj finance & paid 6lac interest, possession delayed for dec2023. How can i claim interest for this property.
    My 1st loan with HDFC is still going on with 0.9lac interest in FY22-23. Please help. Regards Rohit.

    1. CA ILA JINDAL says:

      You will be able to claim the interest paid on second home loan in fy 23-24 only once you get the possession and any unclaimed interest of prior years can be claimed in 5 equal installments from fy 23-24 upto a max of rs.2 lacs per fy aggregate.

  3. Lokeshwar says:

    I had purchased one apartment in Bangalore in 2015-16 by availing 50 lac home loan from HDFC which I have repaid completely with a loan from my EPF Trust in 2019-20. Now I want to go for second house property by taking a loan of 50 lac from the Same HDFC, what is the tax benefits? I am a salaried person with annual salary exceeding more than 30 lac

  4. Parmendra Kumar says:

    I have taken 1st home loan in 2009 and 2nd home loan on Mar’2016 both in same city. I am currently living in same city in parent house and both flats are vacant. Should i eligible for tax benefit on 2nd home loan?
    Also shall i eligible for HRA tax benefit?

  5. Sourabh Jain says:

    Hi, My first house is still under construction and I am expecting possession by march 21, Do we need to have a proof of ownership to declare the house property as Self Occupied for claiming benefit of Interest on HL. if yes, where do I need to show such proof ?

    Thanks in Advance

  6. kumar alok says:

    i am a government employ and i have taken HL in September 2020 and flat registered in October 2020. but i was residing in government quarter upto March 2021 and flat was vacant. may i take the benefit of iHL interest of 2,00,000 u/s 24.

  7. Mohit says:

    if i have purchase one HL in dec 2019 which interest is 80k now and another HL on Nov 2021 which interest would be 2.5 L. Can I claim 2 L under Sec 24 for new property and 80K under Section 80EEA.

  8. Palguna says:

    1. In case of 2 home loans & both are self occupied property, can sec 24 be considered for both home loan deductions? If so how much?
    2. If after 5 years of a Ground floor construction, First floor is constructed. Two separate home loans are considered, so both would be considered as single Self Occupied property or other would be considered as let out property. Pls clarify

  9. Fatema Jinwala says:

    Useful Information and well drafted article.
    I really appriciate your efforts for sparing time and replying to all comments too which is generally not done by other authors.
    Thank you so much

  10. Venky says:

    Iam claiming HRA and receiving rent from my first property and showing as income, the housing loan is closed for this property. Am planning to buy second property and want to know can i claim tax benefits. if yes can you advice how the Tax should be calculated.

  11. Harika Sammeta says:

    Hello sir,
    I have a joint HL with my husband and paying interest of 1.5L which is claimed by both. Now we are planning to purchase 2nd house by home loan jointly. Can each one claim 2L interest from both houses or not. Can principal be claimed in the same manner?

  12. Deepak kumar says:

    Dear sir,
    I am co borrower of home loan on my second property with my brother. But loan is approved on my income only. Can i show different ratio of loan rather than 50:50. last year it was shown as 50:50 share in loan as well as in property.

    1. CA Ila Jindal says:

      Property ratio should be determined as per property document and remains constant. However, w.r.t loan, one can claim deduction according to the payment done by each co owner respectively.

  13. Kashiram Patel says:

    Dear Team,

    I have one house and HL is closed for this house before 2 year and now i am planning to purchase another house on home loan.
    Can i get tax benefits on 2nd Home Loan?
    Both houses can be kept as self occupied property?

      1. Ramesh K says:

        Dear Sir, I also have a similar condition, pl clarify whether the 2L is to be claimed for the second home against 80C even if the property value is 70 Lacs? The loan was sanctioned in Dec 2019.

        1. CA ILA JINDAL says:

          Sec 80c has the maximum limit of Rs. 150000/- in which you can claim principal repayments deductions which can include two Houses as well.

  14. jeetendra yadav says:


    If I have two house loans(HL1&HL2) and both are active at present. HL1 – Annual Interest =80K ; while same for HL2=2,50,000.

    Now I understand I can claim max 2Lakh under Sec 24. But how about Sec 80EEA, whihc allows additional 1.5Lk.

    Can I claim either of two HL’s interest under 80EEA??

    1. CA Ila Jindal says:

      Sec 80EEA deduction depends upon certain conditions as explained in an article above. So, you can claim 80EEA Rs. 1.50 lacs, if you don’t possess any other residential HP on the date of sanction of loan and circle rate is not exceeded 45 lacs and loan sanctioned dated on or after 01.04.2019.

      For any further concerns, pls reach out @


  15. Jack Pillai says:

    I have two flats in my name.

    1. One flat is given on rent of Rs. 15000/- per month. For this flat home loan interest per annum is Rs. 1,41,859/-.

    2. Second flat is also given on rent of Rs. 15000/-per month. The approximate home loan interest for this flat is Rs. 2,00,000/-.

    What maximum tax exemption can I get in above case.

    1. CA Ila Jindal says:

      In this case, you will be able to claim full interest paid on both home loan in your tax return subject to max loss set off limit of Rs. 2 lacs and balance loss shall be c/f for future years.

  16. MOHAN AGARWAL says:

    Dear Sir,
    In an instant case Sale Consideration of Flat is 52 Lacs, Stamp Duty Value is 45 Lacs. Stamp Duty Assessable Value is 52 Lacs (Higher of Sale Consideration or Stamp Duty Value). Loan Sanctioned between April 19 to March 22. Can deduction under Section 80EEA be taken in this case as the Stamp Duty Assessable Value is exceeding 45 Lacs but Stamp Duty Value by itself is not exceeding 45 Lacs.

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April 2024