Is mortgage loan levy exempted ?
Hi, I want to apply for a Home loan to renovate and do some repairs in my house. For which i require 5-6 lakhs. I want a home loan as the interest rate is high and its tariff exempted. But most of the banks say they will approve a mortgage loan and not a home loan. Is mortgage loan due exempted ? and which would you suggest a Home or a mortgage loan ? Please advise. Thanks.
Answers:
First try to recognize what is tax exemption:
Principal repayment of a Home loan is eligible for deduction u/s 80C.
Interest sum of a Home loan is eligible for deduction u/s 24(b).
Mortgage loan repayments do not qualify for such deductions.
But the 'cost of improvement' have a significance. When you sell the flat the 'Indexed cost of improvement' will get deduct from your sale price. So your LTCGs will reduce by more than Rs 6 lakhs and your import tax burden will reduce by 20% of that amount.
HMT
Any loan taken for the purpose of -- for purchase, renovation, construction,or to buy a land 0r a current house/ old house either from wall or from any institute including friends or relative IS NOT EXEMPTED. Exemption is for repayment of the loan and interest of same as per income tax act 1961 clause 80C.Thus take home loan from any any nationalised bank such as PNB, SBI, SBBJ.They need--PAN,ITR of ultimate three years, residence proof, income certificate,valuation report of the house and if you are not in govt. department than at least possible one govt. employee as guaranter.So go for a HOME LOAN. All the best.
For home loan interest deduction underneath section 24(b) and capital conjecture under 80C, read http://mytaxes.in/index.php?topic=9.0.
As far as I know, home loan will be available when you want to buy or build your home. For repair or renovation, you will have to lug mortgage loan. And it might not be exempted from tax. But it is better to ask a qualified CA to clear doubt in this good opinion.
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Answers:
First try to recognize what is tax exemption:
Principal repayment of a Home loan is eligible for deduction u/s 80C.
Interest sum of a Home loan is eligible for deduction u/s 24(b).
Mortgage loan repayments do not qualify for such deductions.
But the 'cost of improvement' have a significance. When you sell the flat the 'Indexed cost of improvement' will get deduct from your sale price. So your LTCGs will reduce by more than Rs 6 lakhs and your import tax burden will reduce by 20% of that amount.
HMT
Any loan taken for the purpose of -- for purchase, renovation, construction,or to buy a land 0r a current house/ old house either from wall or from any institute including friends or relative IS NOT EXEMPTED. Exemption is for repayment of the loan and interest of same as per income tax act 1961 clause 80C.Thus take home loan from any any nationalised bank such as PNB, SBI, SBBJ.They need--PAN,ITR of ultimate three years, residence proof, income certificate,valuation report of the house and if you are not in govt. department than at least possible one govt. employee as guaranter.So go for a HOME LOAN. All the best.
For home loan interest deduction underneath section 24(b) and capital conjecture under 80C, read http://mytaxes.in/index.php?topic=9.0.
As far as I know, home loan will be available when you want to buy or build your home. For repair or renovation, you will have to lug mortgage loan. And it might not be exempted from tax. But it is better to ask a qualified CA to clear doubt in this good opinion.
Related Questions: