How to calculate effective interest rate after taking tax benefits into consideration?

POSTED BY chaitanya_krish ON April 30, 2014 9:50 pm COMMENTS (4)

my tax bracket : 20%

home loan interest rate : 10.95 %

duration : 30 years.

loan amount : 24 Lakhs

how to calculate effective interest rate after taking tax benefits into consideration?

 

4 replies on this article “How to calculate effective interest rate after taking tax benefits into consideration?”

  1. chaitanya_krish says:

    Thanks a lot !!

  2. ashalanshu says:

    Dear Chaitanya, 20.6% is the income tax slab you are in. Hence out of 100, 20.6 is saving. So remaining interest is 79.4. That’s how I come to 79.4% .

    Thanks

    Ashal

  3. chaitanya_krish says:

    hi ashalanshu ?

    thanks for reply.
    how do you arrived at 79.4% figure?
    can you please explain the calc. !!! thanks !!!!

  4. ashalanshu says:

    Dear Chaitanya, the effective ROI on home loan for you is 79.4% of 10.95%. Hence effective ROI on home loan is 8.6943

    Thanks

    Ashal

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