Get home loan tax benefit in year 2016 which interest amount is paid between 2011 to 2015

POSTED BY Paresh ON January 23, 2013 1:51 pm COMMENTS (3)

Hi,

I bought one 1000 square feet plot in Rs. 12,00,000. For which I have taken Rs. 6,00,000 loan from Axis Bank. Currently I don’t want to build house on this. My plan is to complete this plot loan first and take another loan to build house. By that time I will also accumulate money for down payment. I will prefer SBI loan for house construction.

Currently I have been paying EMI of Rs. 8,000 since Aug 2011 and I cannot get tax benefit until house is not constructed.

My question is, once house will be constructed then can I get tax benefit of Axis Bank loan interest repayment which I will pay between Aug 2011 and Aug 2016. As per current law Rs. 1,50,000 is tax free if we pay interest for home loan.

Please suggest.

Thanks

Paresh

3 replies on this article “Get home loan tax benefit in year 2016 which interest amount is paid between 2011 to 2015”

  1. Ashal Jauhari says:
    January 23, 2013 at 5:16 pm

    Dear Paresh, to avail tax benefit, continuity of the loan is required. Once you repay your plot loan to close it, you can not claim tax benefit on it.

    Thanks

    Ashal

    Reply
  2. Paresh says:
    January 23, 2013 at 5:01 pm

    Hi Ashal,

    Thanks for reply.

    Yes you got my question. If after loan closure if we cannot take tax benefit then instead of taking loan from SBI I can take top-up loan from Axis Bank to construct house. I will take top-up loan when existing loan amount will become 0. I am not sure I will still need to give down payment.

    Now in this case can I take the tax benefit of old loan interest repayment (2011 to 2015) and new loan repayment (principal and interest) simultaneously? I heard something about 5 equal annual installments. I don’t know in detail about it.

    Thanks
    Paresh

    Reply
  3. Ashal Jauhari says:
    January 23, 2013 at 2:54 pm

    Dear Paresh, let me understand your query first. You are running Axis bank plot loan since 2011 & ‘ll repay in full till 2015. After that ‘ll avail construction loan from SBI. The construction ‘ll be over in 2016.

    Now in the year 2016, you want to avail tax benefit for the existing SBI home loan + the unclaimed interest of Axis bank. Sorry my dear friend, as the loan of Axis bank ‘ll not be running at the time of claim, you ‘ll not benefit against this loan.

    How to go ahead in this situation? Simple transfer your existing plot loan to SBI from Axis bank. After transfer, do not pay in full & apply for construction loan. Use the repayment amount for your downpayment towards construction. In this case, you can avail, Axis bank till date unclaimed interest + SBI’s interest. Interesting but that’s how it ‘ll work.

    Thanks

    Ashal

    Reply

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