Reduce Your Taxes With a Second House

Bangalore: If you were planning to buy a second house but were scared of the high costs, there is some good news in store for you. Buying a second house can actually help you save money on taxes, as reported by Amit Shanbaug of the ET Bureau. There are quite a few hidden advantages of buying a second home and some of them are as follows –

1. Exemption on Interest

A home loan taken for self-occupancy gets a deduction of Rs.1 lakh on the principal amount under Section 80C. A deduction of Rs.1.5 lakh is available on the interest paid on the home loan, under Section 24. These deductions are available on the first house only. In case of a second home, only the interest payable and not the principal amount is eligible for tax deductions.

However, the good thing about this is - the deduction on interest payment on the second house does not have a limit. Adhil Shetty, Chief Operating Officer of BankBazaar.com, explains by saying that no deduction limit exists for the second home as it has been rented.