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Is Mortgage Loan Interest Tax-Deductible in India?

· Mortgage Loan,mortgage loan proces

Due to the rising number of initiatives like PMAY by the government, the demand for mortgage loans has risen considerably. It has thus recorded a growth rate of about 18% in the previous fiscal and is expected to increase further due to its secured nature.

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Subsequently, with the rising demand for such loans, people often come up with a question as ‘is mortgage loan interest tax-deductible in India?’ Since the availed amount is considerably higher, it is much likely that you will look for such benefits of tax exemptions.

Available options for tax exemptions

You can avail tax exemptions on interest paid for these type of mortgage loans -

  • Home loan

Under Section 24(b), you can claim tax exemption of up to Rs.2 lakh on the interest paid in your home loan.

Also, for a first-time buyer, they can claim an additional exemption of Rs.1.5 lakh on the interest paid under Section 80EEA.

  • Loan against property

The tax exemption on loans against property is dependent on its end-use. For instance, when you use the loan to fund your higher education, you become eligible for tax exemption under Section 80E.

Additionally, loans against property used for home renovation can also provide tax benefits of up to Rs.30,000 under Section 24(b).

The loans against the property process for application is usually similar to that of home loans. However, their end-use differs. While the former can be used as a personal loan, the latter is usable for home construction or purchase.