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Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
As an aspiring homeowner, you can take advantage of home loans through tax benefits under Section 80C. Every year, you can save up to ₹1.5 lakhs on your income tax, easing your financial burden and allowing you to save money.
Owning a home offers generous tax deductions under the Income Tax Act, and recent budget revisions sweetened the deal even further. The government often allows various tax rebates for individuals seeking home loans. Recently, Finance Minister Nirmala Sitharaman proposed extending the deadline for claiming extra deductions on home loan interest until March 31st, 2024, benefiting anyone who borrowed before March 2022.
A home loan is a secured loan you can take from a bank or other lender to purchase a property. The loan is secured by the property itself, which means that if you default on the loan, the lender can foreclose on the property and sell it to recoup their losses.
Home loans typically have fixed interest rates, which means that the rate at which you pay interest on the loan will remain the same throughout the term of the loan. This can provide you with predictability and stability in your monthly payments.
Owning a home in India can be a great investment, and the government offers several tax benefits to encourage people to borrow for their dream home. Home loan tax benefits that you can avail include:
You can claim a deduction of up to ₹5 lakhs on the principal amount you repay in a financial year under Section 80C of the Income Tax Act. This deduction applies to self-occupied and rented properties, but the property should not be sold within five years of possession to retain the benefit.
You can claim a deduction of up to ₹2 lakh on the interest paid on your home loan for a self-occupied property. It applies only to loans taken for the acquisition or construction of the property and should be completed within five years.
First-time home buyers can claim an additional deduction of up to ₹1.5 lakhs on the interest paid on a home loan, over and above the ₹2 lakhs limit under Section 24(b). These benefits apply to loans taken between April 1, 2019, and March 31, 2024, for properties with a stamp duty value of up to ₹45 lakhs.
If you take a home loan jointly, both co-borrowers can claim separate deductions on the principal amount and interest payment under their respective income tax returns. This can significantly increase your total tax savings.
The Indian housing market offers various home loan options to cater to various needs and financial situations. Some popular types of loans are:
This is the most common type used to finance the purchase of a ready-to-move-in apartment, a builder’s floor, or an independent house. The loan amount can be up to 90% of the property value. Interest rates vary depending on factors like loan amount, tenure, credit score, and lender.
These loans are ideal for those who want to build their own house on a plot of land they already own. The loan amount is amount can be up to 80% of the construction cost and is disbursed in stages based on construction progress. However, the interest rates may be slightly higher than purchase loans.
These loans are meant for renovating or expanding an existing property. These can be used for various purposes like painting, flooring, electrical work, etc. The loan amount depends on the nature and extent of the renovation.
A plot loan, also known as a Land Loan, is a type of secured loan offered by banks and Non-Banking Financial Companies (NBFCs) to help individuals or businesses purchase a plot of land. Interest rates on these loans are usually higher than home loans, as there is no existing structure to act as collateral. Expect rates ranging from 8.5% to 12% per annum.
Balance transfer loan allows you to switch your existing home loan from one lender to another with potentially better interest rates or loan terms. The processing fees and other charges may apply to this loan.
Pradhan Mantri Awas Yojana is a government-sponsored scheme offering subsidies on interest rates for low-income homebuyers. This loan’s eligibility criteria and benefits vary depending on the sub-scheme (PMAY-G, PMAY-LIG, PMAY-MIG).
Your home loan’s EMI covers four main parts. These components get tax breaks in different ways under different sections of the Income Tax Act. Here are the main components of a home loan payment:
Owning a home in India extends far beyond shelter. It is a secure investment, a tax haven, and a legacy you can build on. With extended tax benefits and diverse loan options, this is the right time to consider homeownership. Research, compare, and make a well-informed decision for the ownership of your dream home.
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Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
