Is taking home loan for tax-benefits really advisable?

POSTED BY s ghumre ON April 5, 2013 4:17 pm COMMENTS (4)

Hi folks, 

I’m interested in buying a property. But I’m thinking if I should opt for a home loan or shall I use the funds that I have.

I’m not able to weigh what would be beneficial for me between these 2 options:

1)Taking a home loan and paying a high interest rate on it for the next 10-15 years or

2) Taking a home loan and saving tax on it?


Please advise!


Ms. Ghumre

4 replies on this article “Is taking home loan for tax-benefits really advisable?”

  1. Dear Sir,

    If you are buying a flat for investment purpose and you have the capability of repaying the home loans, going for it is the best option. As with paying EMI’s you also start getting rents if you rent the property. Also for the interest portion on loan you get a deduction in income tax as well.

    With all that real estate is something which would never depreciate provided you are making a well informed purchase.

    Hope this resolves your query.

    Thanks & Regards,


  2. Dear S Ghumre, for investment purpose, please do not opt for a real estate option. Please stay invested in pure financial products.



  3. s ghumre says:

    This would be from an investment perspective. That is the reason I’m also trying to look at tax benefits, if at all there are any!

  4. Dear Ghumre, are you buying for consumption or for investment? Tax benefit should not be the primary reason to purchase a property with home loan. Please treat the tax benefit on housing loan as icing on the cake not the cake itself. 🙂



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