1. To maximize savings on home loans taken for two (or more) houses, consider houses with highest loans as non-exempt one, but ensure that their interest payments are higher than the principal-cum-interest payment on loan for the exempted primary residence.
2. Interest paid on loan taken to purchase commercial property is also eligible for tax deduction as in case of residential property.
3. If a house is sold within 5 years of the financial year end in which it was purchased, all financial deductions claimed under Sec 80C with respect to the property are added to the taxable income in the year of sale.
4. If any of the houses is sold after 2 years, profit will be taxable as long-term capital gains (with indexation), but if you invest this money to construct a residential property within 3 years or buy another within 2 years, your income will be tax-exempt u/s 54F, which will, however, be reversed if the new property is sold within 2 years of being constructed / purchased and the profit will be considered a short-term capital gain and taxed at normal slab rates.
5. You can also save tax if you invest the profit in a special bank account under the capital gain account scheme, or in eligible bonds up to Rs.50 lakhs u/s 54(EC) redeemable after 3 years, provided this investment is made within 6 months of the sale.
2. Interest paid on loan taken to purchase commercial property is also eligible for tax deduction as in case of residential property.
3. If a house is sold within 5 years of the financial year end in which it was purchased, all financial deductions claimed under Sec 80C with respect to the property are added to the taxable income in the year of sale.
4. If any of the houses is sold after 2 years, profit will be taxable as long-term capital gains (with indexation), but if you invest this money to construct a residential property within 3 years or buy another within 2 years, your income will be tax-exempt u/s 54F, which will, however, be reversed if the new property is sold within 2 years of being constructed / purchased and the profit will be considered a short-term capital gain and taxed at normal slab rates.
5. You can also save tax if you invest the profit in a special bank account under the capital gain account scheme, or in eligible bonds up to Rs.50 lakhs u/s 54(EC) redeemable after 3 years, provided this investment is made within 6 months of the sale.