Home loan

Do you benefit from this advantage with your mortgage? To find

There are various deals and offers, especially for first-time home buyers, that one can take advantage of.

Home loans help buyers achieve one of their fondest dreams: buying a home. However, another aspect of a home loan makes it an attractive proposition – the monetary benefits a borrower can enjoy.

Fiscal advantages

The EMI that one pays for a home loan has two components, i.e. principal and interest. A borrower may qualify for a refund of tax on these items under the various sections of the Income Tax Act 1961.

Nalin Jain, Chief Client Officer and Chief Operating Officer at Godrej Capital, says: “Under Section 80C, borrowers are eligible for a tax refund of up to Rs 1.5 lakhs on the principal of the home loan. . This benefit is only allowed on a fully constructed property. Moreover, one can avail a tax benefit of Rs 2 lakhs on home loan interest under Section 24. One essential thing to note is that the tax benefit on home loan interest is available on a basis payable.

For interest paid while the property is under construction, Jain explains, “Borrowers can claim an interest deduction in five equal installments beginning in the year the property is acquired or the structure is completed. This deduction is in addition to the deduction a customer is otherwise eligible to claim on income from the ownership of the house.That said, the maximum eligibility ceiling remains at Rs 2 lakhs.

For a property held in condominium where the co-owners are also on the loan structure,” Jain points out, “both holders can claim an interest deduction on the home loan of up to Rs 2 lakhs and repayment of the principal of up to Rs 2 lakhs. at Rs 1.5 lakhs under the appropriate sections in their tax returns.

Reasons you shouldn’t default on home loans

Regular default has serious effects on borrowers;

  1. This affects credit score (maintained by credit reporting companies) – which Jain says “reduces creditworthiness, thereby limiting the borrower’s ability to borrow on preferential terms – amount, term and interest rate. ‘interest”. Depending on the severity of the default, a person may be denied any access to loans in the future.
  1. This may lead to legal action against the defaulter by the lender in an attempt to recover the outstanding loan amount.
  1. Defaulter Jain points to “the risk of losing the property as it can be repossessed by the lender, up to the outstanding loan amount”.
  1. It attracts additional fees from credit institutions, which accumulate, thus increasing its unpaid liabilities.
  1. It also affects employability, as some organizations perform background checks, including credit score checks, and may be hesitant to hire employees with lower credit scores.


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