Home Loan benefits for under construction property
Purchasing a ready-to-move-in house can be an expensive affair as the prices of residential apartments are continually escalating. Saving some cash is possible, if you consider investing in an under construction property. Generally, under construction properties quote 20% less than completed ones. By opting for an under construction property you may not only be gaining monetary benefits on the cost of purchase but would also get tax benefits on home loan.
Your savings can become even more effortless if you have a reliable lender to guide you through the home loan process. Your overall home loan experience hugely depends on your choice of lender for the loan and Lenders like Bajaj Finserv offer 3 EMI free months on Home Loans to facilitate ease of repayment.
Let’s explore what tax benefits for under construction property that you can avail.
- As under construction properties are comparatively cheaper, the funds required for them would be relatively low. Hence, the EMI payable on the loan amount would also be modest.
- As the EMI on the loan is quite reasonable, you can increase your monthly instalments to reduce the loan tenure. This will help you save more on your total interest payment.
- The person who is availing of the home loan can postpone the deduction of the interest amount paid during the pre-construction phase.
- The interest amount paid prior to the year of completion is accumulated and 1/5th of this amount is allowed as deduction each year for 5 years from the year of completion. Simply put, the interest paid on the home loan during the pre-construction phase can be availed for deduction in these five equal instalments. In case the property is occupied before the completion of these five years, then the deduction is limited to INR 2 lakh. This is one of the major tax benefits for under construction property.
- Another one of the home loan benefits for under construction properties is that the loan is structured in a way where time of disbursement of each loan instalment by the lender will coincide with the time of completion of another level of the project by the developer.
- One can avail tax benefits for the stamp duty and registration fee on the property. These are some tax exemptions for home loan under construction properties.
If you are taking a home loan to buy your house, consider the one that offers low home loan interest rates, ease of repayment, and few additional incentives. Home Loan schemes offered by Bajaj Finserv proposes benefits like nil foreclosure charges and prepayment facility. With Bajaj Finserv you can apply online for Home Loans at interest rates starting from as low as 9.75%.