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POSTED BY ON March 15, 2014 9:10 am ONE COMMENT
I recently took a top up loan from ICICI Bank. I already have a home loan with them for which I have been claiming tax exemption under sections 80C and 24.
What I have read on the internet
1. You can claim tax exemption on the top up loan provided it is used for purpose like home improvement, renovation etc of the same house for which loan has been taken (How do I prove this to the income tax department is a mystery)
2. You can claim tax exemption only on the interest portion of the top up loan and that too for a limit of 30,000 only.
3. You can’t claim any tax exemption on top up loan
There is no conclusive information anywhere. So my question is open to this forum.
Can I avail any kind of tax exemption on top up loan? How much and how?
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Dear Raja, if you are going to use the loan for the purpose of home improvement/repair and renovation, the bills ‘ll be there for the same and in case, Tax people ask you can show these bills to prove the end use. please do note, the combined benefit for a self occupied property in such case ‘ll be limited to 150000 Rs. and you can not claim kore than this. There is more to it. The interest part of top up loan is yes limited for 30000 Rs. only. Please read the section 24(b) in detail to understand this.
Thanks
Ashal