House Building loan

POSTED BY Arup Kr. Dey ON April 14, 2013 8:40 am COMMENTS (6)

Dear Sir, I have a House Building loan, I am a salaried person.For this loan I got tax benefit U/S 24 For interst amount(Rs.15622), & For Principle amount (Rs.14400) I got Tax benefit U/S 80c.Now From A.Y-2014-2015 only my Principle amount will be Nil.Now Can I invest my Principle amount  in NSC to get tax benefit U/S 80c, Or what will be the best Investment for tax savings?
Can I get the Deduction U/S 24 (For interest) After Investing the principle amount to NSC or any other Scheme?

6 replies on this article “House Building loan”

  1. Dear Arup, LIC Prem. of 33K is eligible for this year. 9K PF prem. is also eligible. The interest of NSC purchased in 2012-13(coming around 4K) is also eligible. So it’s around 46K roughly. So your open position is for 54K Rs. Now do tell me being a bank employee, why are you thinking NSC only & not PF, PPF, Tax Saver FDs (all debt products) & in case of Eq., Tax saver funds?



  2. Arup Dey says:

    Dear ashal,my current beak up for 80c-
    33519- LIC
    45000- Nsc(purchased 2012-2013)
    9360- EPF
    14,400 Was my House building loan installment upto F.Y 2012-13,But from now it will be nil.

  3. Arup Dey says:

    Thanks all For giving resoponse,Every1 ask me if principal amount is nil then how interest? actually I am not closing my home loan.At the time of taking the loan my aggrement with bank in such a way where I can repay my whole principle within any time of the loan term,but for this I will not get any chance to reduce my interest amount,but I have to pay the interest upto the end of the loan term,as it was calculated at the time of taking plz suggest me.. I am a bank employee.

  4. Dear Arup, if principal amount is nil, there can not be interest amount on the loan. So how are you going to claim section 24(b) interest related benefit?

    Why are you thinking of NSCs only when you may have a variety of other instruments? PF, PPF, Life Ins. prem., Children Education tuition fee……..

    Please provide your current break up of section 80C in the FY 2013-14.



  5. Syamantak says:

    if your risk appetite is low and you are looking for safe return, invest in PPF than NSC. PPF enjoys EEE status (Tax is exempted on the interest that you earn at the end of tenure. PPF has a lock in period of 15 years though 🙂

  6. Syamantak says:

    You can invest in NSC irrespective of any situation, if you still have some gap to fill in 80C you may use NSC for topping up your existing investments in 80C

    Deduction U/S 24 can be claimed only if you have an existing home loan on a home which is self occupied (remember, under construction home is not eligible for this). as you said there is no ‘principle’ amount for this year, I assume you have closed the home loan. in that case you can not claim anything under section 24

    hope this helps

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