An individual can take multiple home loans as long as the lender is satisfied with the borrower's income, credit profile and ability to service the loans. According to reports from Mint, Moneycontrol, and NDTV Profit, there is no blanket rule limiting the number of home loans a person can have. The banking regulations do not prescribe a fixed limit on the number of home loans an individual can take, and there is no general legal restriction in India on the number of residential properties a person can own. As per Moneycontrol, a borrower can take as many home loans as they can service within their income capacity. However, taking another loan does not mean that the taxpayer will automatically receive a separate set of tax deductions for each property - the available benefits depend on the nature and use of the properties.
Under the old tax regime, the deduction for interest paid on loans for self-occupied properties is subject to an overall limit of ₹2 lakh per year. As reported by Mint, Moneycontrol, and NDTV Profit, this limit applies to the combined interest deduction for all eligible self-occupied properties. For properties that are let out, or are treated as deemed let-out properties when more than two houses are classified as self-occupied, the actual interest paid can generally be claimed as a deduction while calculating income from house property. However, even when the interest deduction results in a loss under the head "Income from house property", there is a limit on how much of that loss can be set off against income under other heads in the same year. Tax rules also allow an individual to treat up to two houses as self-occupied, with additional properties being treated as deemed let-out properties for tax purposes.
Even when the interest deduction results in a loss under the head "Income from house property", there is a limit on how much of that loss can be set off against income under other heads in the same year. According to Mint, Moneycontrol, and NDTV Profit, under the old tax regime, the amount that can be set off against other income is restricted to ₹2 lakh in a financial year. Any remaining loss can be carried forward for up to eight assessment years and adjusted against income from house property in subsequent years, subject to the applicable rules. The loss can only be set off against other income up to ₹2 lakh annually, with any excess carried forward for future years. Multiple home loans can result in a larger interest outgo and consequently, a loss under the head "Income from house property", but this loss cannot be freely adjusted against income from other sources.
The tax benefit on repayment of home-loan principal is also subject to a limit. Under the old tax regime, principal repayment can qualify for deduction under Section 80C, along with other eligible investments and payments. As reported by Mint, Moneycontrol, and NDTV Profit, the combined deduction under Section 80C is capped at ₹1.50 lakh in a financial year. Therefore, having multiple home loans does not increase the overall Section 80C limit. Whether you have one home loan or more, the deduction allowable for repayment of home loan is restricted to ₹1.50 lakh together with various other eligible items only under the old tax regime. Taking a second home loan does not increase the Section 80C limit to ₹3 lakh - the limit remains at ₹1.50 lakh regardless of the number of loans.
The tax treatment is different under the new tax regime. According to Mint, Moneycontrol, and NDTV Profit, principal repayment on a home loan does not qualify for the Section 80C deduction under the new regime. Similarly, interest paid on a loan for a self-occupied property does not qualify for deduction under the new regime. For let-out or deemed let-out properties, interest deduction is subject to the applicable rules and, in the case of let-out property, is restricted to the taxable rental income. Under the new tax regime, no tax benefit for principal repayment is available, and no interest deduction is available for self-occupied properties. The new tax regime provides fewer deductions related to home loans, making it less beneficial for homeowners with multiple properties compared to the old regime.
