Save on taxes if you own multiple houses

If a person owns more than one residential property than the maximum benefits on tax can be availed. You should choose one as your primary residence and therefore the income generated from this property will be treated as nil and the property will be exempted from taxes as well. The condition will remain same even if the property is rented out. However, Rs. 1.5 lacks will be applied for the deduction of interest of loan. The interest on loan taken for the other home will be deductable from taxable income. One can save extra bucks by considering the house with highest loan as the non exempted as the interest on this loan will be higher than principal & interest paid. If either of the house is sold within a time period of three years the profit will be taxable. But the income will become tax exempted if the money is invested in buying another house within 2 years or used to construct the house within three years. in case the newly bought property is sold within a period of 3 years than the amount will again become taxable. Thus, the tax will be applied as per the slab rates of short term gains.

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