I inherited a plot of land from my father and own a house as well, which is on rent. I have recently bought a third property with a home loan. Will I qualify for tax rebate on this home loan?
Mohan Wadhwa, Gurugram
Tax deduction on the principal amount of the loan, under Section 80C, up to a maximum of Rs 1.5 lakh is available for any number of houses. A further deduction of home loan interest paid for self occupied home up to Rs 2 lakh (Rs 3 lakh for senior citizens) annually is available under Section 24 of the Income Tax Act. You can deduct the interest paid from the rental income if the property is rented out. In case you own more than one property and none of them are let out, only one is considered to be occupied by you and you will have to pay tax on a deemed rental income from the other properties.