Is There Any Tax Benefits Available Under Property Loan?
A loan against property is a secured loan that comes with similar features like a home loan. The loan amount depends on current market value of your house. Some lenders provide loans up to 85% of your house price. It offers property loan tax benefit similar to home loans. However, such benefits are only available in specific cases.
Tax Benefits Earned Under Such Loans
Significant loan against property tax benefits includes the following:
Higher Education: Under Section 80E, you can claim income tax deductions if the funds are used to cover educational expenses. There is no upper limit of exemptions. However, you can only avail the benefits for a maximum of 8 years.
Home Purchase or Construction - Under Section 80C, you can avail tax exemptions of a maximum of Rs. 1.5 Lakh on loan principal. In addition to that, under Section 24(b), applicants can earn tax exemptions of maximum Rs. 2 lakh on the loan interest paid.
Both these sections are valid if you use the loan to purchase or construct a property.
Home Renovation: Under Section 24(b), individuals can also earn benefits on the interest paid. However, the limit can only be extended to Rs. 30,000. Since home loans cannot be availed to revamp your property interior or exterior, opting for a loan against property is highly beneficial for such purposes.
Make sure to check the mortgage loan interest rate before you apply for such loans now that you know all about the income tax benefits available on the same.