5 queries regarding tax exemption on home loan

POSTED BY Raja Roy ON January 20, 2014 1:26 pm ONE COMMENT

Hi,

I currently reside in Bangalore and planning to buy a property in Kolkata. The property is currently under construction and I expect to get possession of the property by end of 2014. The property is worth 41 lakhs and I am taking a home loan from SBI. My questions are:

1. How much tax deduction I am eligible to get due to the housing loan?

2. Will I still get HRA since I reside in Bangalore and the property is in Kolkata.

3. Does my income tax benefit depend on the completion of construction of the property.

4. Is is advisable to have this loan on a joint name so that the other person can also avail tax  benefits?

5. What should be the tenure of the loan? I would be comfortable paying EMI for a loan duration of 15 years. Is is advisable to reduce the tenure and get the loan over with or would you suggest taking the tenure as the usual 20 years and investing the remaining amount elsewhere?

Thanks in advance for your help!

One reply on this article “5 queries regarding tax exemption on home loan”

  1. ashalanshu says:

    Dear Raja, I’m trying to answer your querries.

    1. How much tax deduction I am eligible to get due to the housing loan?
    if you are asking for home loan interest, for self occupied property, it ‘ll be 150000 Rs. If the property ‘ll be put on rent, the rental income ‘ll be added but all the interest ‘ll be available for deduction.

    2. Will I still get HRA since I reside in Bangalore and the property is in Kolkata.
    yes, your HRA elated benefit ‘ll continue.

    3. Does my income tax benefit depend on the completion of construction of the property.
    Yes. To claim interest benefit on home loan, the property possession should be there with you.

    4. Is is advisable to have this loan on a joint name so that the other person can also avail tax benefits?
    If the said other person is also earning an income, it’s advisable to apply in joint name for both, property ownership as well as home loan. Please do not with out ownership in the property, no benefit on home loan ‘ll be there for this other person.

    5. What should be the tenure of the loan? I would be comfortable paying EMI for a loan duration of 15 years. Is is advisable to reduce the tenure and get the loan over with or would you suggest taking the tenure as the usual 20 years and investing the remaining amount elsewhere?
    If you are comfortable with 20Y EMI, investing the saved amount into your retirement investment or some other goal ‘ll be wise thing.

    Thanks

    Ashal

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