Dear Sir,
This is my first question to this group. Here is the situation that I am in now, request your expert opinion :
1. I have a home loan running in Bank of Baroda - The house supposed to be under construction and handed over to us by 2013 but due to various reasons, it's not yet done - currently no construction work is going on. I am paying EMI towards this though with no benefit that can be claimed.
2. I have another home loan running with HDFC for 20L, now I am going to switch over this loan to SBI. During this process, SBI is giving a home top-up loan option.
I want to use this top-up loan ( which is at lesser rate and longer tenure )to repay my home loan with Bank of Baroda once for all since BoB loan doesn't get me any benefit.
In such a case, I learnt that top-up loan if used for house construction,renovation is eligible for interest deduction under section 24 ( ? ).
Since I am going to repay home loan using the top up loan, will that also be under tax exempt under section 24 i.e. interest of it. I presume so as anything towards home could be claimed under IT ( since it's not primary home, interest uptil any amount can be claimed )
Please clarify.
3 Answers
Hi,
Yes top up loan if used for construction purposes , can take tax benefits on it.
But, as you have not taken the possession of the property -1 (under-construction), you can not claim tax benefits as of now.
Kindly read:
http://www.relakhs.com/top-up-loans-vs-personal-loans/
http://www.relakhs.com/under-construction-house-how-to-claim-tax-deduction-on-home-loan-interest-payments/
Sir, thanks, I know possession is not taken, I know about PPI, what I was wondering is since I am going to use the top up loan to repay only home loan ( am not getting any benefit ), was wondering if I can get tax claims - also can nationalized bank ( BoB) can lower the EMI to increase the tenure any time now ? Can I approach the Bank ?
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