TopUp Housing loan – Income Tax Savings

POSTED BY Jha ON September 2, 2014 7:07 pm COMMENTS (3)

Hi friends, I would like to go for a Top Up Housing loan from IDBI. They say, they will open a second loan account for the same as they cant give loan through the same number (IDBI claim so…). My doubt is whether I am eligible for the Income Tax Savings if I go for a second account. Whether both housing loans (original & topup) are eligible for IT savings? Pl. note this house is LetOut House and I am claiming HRA in another city.

Pl. clarify.

Thanks, Jhaji

3 replies on this article “TopUp Housing loan – Income Tax Savings”

  1. Jha says:

    Dear Cardexpert & Raja Ji

    Thanks both of you for your inputs. However, I would like to know, how can I prove this topup loan is used for house renovation.

    regards, Jhaji

  2. Raja says:

    There is no income tax rebate on top up loan. That is the reason all banks give it under another loan account. They readily offer it because they are taking your home as collateral, making it a safe bet for them. This means that unless you clear top up loan, you will not get your home papers back even if you have cleared your home loan.

    There is some provision to claim deduction on interest to a max limit of 30K provided the top up loan is used only for renovation of the home. I do not have more details, so consult a CA.

  3. Credexpert says:

    Dear Jhaji,

    Irrespective of the number of loan accounts, a tax shield is available only if you have taken the loan for modifying or renovating the house. But if you have taken the loan for buying furniture and furnishings for the house then tax shield will not be available on the loan.

    Regards,
    Credexpert

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