the indian economy has been witnessing a boom in the recent past however rising property prices and growing interest burden on home loans are worrying buyers the budget has not offered any relief but you can still make ample use of the existing provisions to save substantially on property investments heres how buying a house owning a house is not just a dream but a necessity and there are several tax benefits as well however when buying a house you would do well to consider the following a its always advisable to go in for a housing loan interest paid on home loans can be deducted from your taxable income up to a maximum of rs 15 lakh this can be a double bonanza in the case of joint ownership if the joint owners equally bear the interest burden each gets a deduction up to rs 15 lakh however the total deduction cannot exceed the actual interest paid by the joint owners so if the total yearly interest liability is say rs 4 lakh and the property is equally owned by three people then each gets a deduction of rs 133333 b principal repayment up to rs 1 lakh is allowed as a deduction from your taxable income under section 80c provided the loan is borrowed from a recognised financial institution owning two or more houses these days its not uncommon to see people owning more than one property while interest paid on loan taken for a single property is eligible for deduction up to rs 15 lakh only no such ceiling is prescribed for a new loan taken to purchase a second property thus if your rental income from the second property is rs 4 lakh and the interest expense on loan taken for the second property is rs 25 lakh then your income from house property shall be calculated as below by claiming deduction for the entire interest expense of rs 25 lakh you can substantially reduce your tax liability had there been no deduction of interest expense you would have had to pay tax on rs 28 lakh instead of rs 30000 however if your second house is lying vacant generating no rental income you can still claim deduction for the interest paid there will nevertheless be a notional rental income and the interest will be deducted from this income selling property to minimise tax outflow while selling a property take into account the following a a property or house held for under three years is termed as a shortterm capital asset and does not attract any tax incentive however if you sell the property only after three years it is a longterm capital asset which is eligible for some tax relief bselling property attracts capital gains tax however if you invest the proceeds from selling the property into buying or constructing another house the taxman exempts you from paying taxes but keep in mind the following if you intend to purchase a new