A "low interest" loan shouldn't mean you have very little interest in paying it back!
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    Tax Benefits on Home Loan

    Bank Name
    Interest Rate Range
    Processing Fee Range
    Loan Amount
    Tenure Range
    9.15% - 9.3% Floating
    0% to 0.35% (max. ₹11,500)
    15L - 10Crs
    1-30 Years
    Response Time Within 30 minutes
    9.3% - 10.5% Floating
    0.25% to 0.5% (min. ₹5750) One time fee
    5L Min
    1-30 Years
    Response Time Within 30 minutes
    9.2% - 9.5% Floating
    0.5% (min. ₹11,500) One time fee
    5L - 10Crs
    3-30 Years
    Response Time Within 30 minutes
    Paperless Approval Option Available
    9.15% Floating
    Up to 0.5% (max. ₹11,500) One time fee
    5L - 10Crs
    1-30 Years
    Response Time Within 30 minutes
    9.20% Floating
    Up to 0.5% One time fee
    2L - 3Crs
    1-30 Years
    Response Time Within 30 minutes
    9.15% - 10.25% Floating
    Up to 0.5%
    15L - 5Crs
    1-20 Years (10 yrs plot loan)
    Response Time Within 30 minutes
    9.15% - 11.75% Fixed/Floating
    Up to 1% One time fee
    5L - 10Crs
    1-30 Years
    Response Time Within 30 minutes
    9.10% - 9.15% Floating
    5750 One time fee
    40L - 5Crs
    1 - 25 Years
    Response Time Within 30 minutes
    12.50% - 19% Floating
    2% One time fee
    2L - 1Cr
    1-20 Years
    Response Time Within 30 minutes
    9.15% Floating
    5,000 to ₹10,000 + S.T. One time fee
    20L - 10Crs
    1-30 Years
    Response Time Within 30 minutes
    11.12% Floating
    1% One time fee
    2L - 5Crs
    1-30 Years
    Response Time Within 30 minutes
    14% Floating
    2% One time fee
    2 - 25L
    Response Time Within 30 minutes


    Buying your own home is really expensive and for some of us it’s a dream out of reach. But with a home loan, we can all achieve this dream whether it’s buying a house or constructing one. Home loans are a credit line bearing lower interest rates and long-term tenures so that you can pay the loan amount back with ease. An added bonus is that they are eligible for tax benefits too, so the burden is lesser on you while you repay your loan.

    Tax Benefit on Home Loan:

    Home loans are eligible for tax benefits under three sections of the Income Tax Act. Your home loan consists of two components: Principal and Interest. You may be eligible to claim tax benefits for these components based on certain criteria. Firstly, you must be the owner, or a co-owner and co-borrower in the case of joint home loans.

    Tax Benefits on Home Loan

    Principal amount under Section 80 C - an Individual or an HUF (Hindu undivided family) can claim tax benefits on the principal repayment of a loan.

    • Stamp duty and registration charges are also eligible for deductions.
    • Life Insurance Premium, NSCs, EPF, ELSS can be claimed along with the home loan, subject to an overall deduction of Rs. 1 lakh in a year.
    • Commercial property and home renovations or additions on existing property is not eligible under Section 80C.
    • The loan should be taken from banks, HFCs, Central & State governments, LIC, NHB, Public Company or a Public Sector Undertaking.

    Interest payment under Section 24(b) – it allows for tax deduction on interest payable on a loan taken to buy or construct a house.

    • You can also claim this benefit for repair or reconstruction of an existing property.
    • Processing fees and prepayment charges will also be treated as interest payment.
    • This benefit is available for residential and commercial property as well.
    • Owners of let-out properties can claim full interest payment, but exemption for self-occupied properties is restricted to Rs. 1.50 lakhs per annum.
    • This tax benefit is also applicable for loans taken from friends and family.

    Deductions under Section 80EE – For loans sanctioned between April 1, 2013 and March 31, 2014, an additional tax benefit is provided to first-time homeowners.

    • The property should be valued at Rs. 40 lakh or less.
    • The loan amount should be Rs. 25 lakh or less.
    • This deduction can be claimed only in 2013-14 and 2014-15.
    • You can claim up to a maximum of Rs. 1 lakh.

    Tax benefit on second home loan:

    If you plan on purchasing or building a second home, one property will be marked as self-occupied and the other will be deemed a let-out property. Both properties are eligible for tax benefits.

    • For the let-out house, you can claim deductions only on the interest payment.
    • There is no restriction on the maximum amount.
    • Taxes paid to the local authorities, namely municipal taxes can be filed for tax deductions in the financial year in which they are paid.
    • 30% of the annual value of the property is eligible for deductions for repair and maintenance charges.

    How to calculate tax benefit on home loan:

    The easiest way to calculate your tax benefits on home loan is by using an online calculator. Simply enter your home loan details and click on calculate and a detailed tabulation will pop up. The details you will generally need are:

    • Loan amount
    • Tenure
    • Interest rate
    • Loan start date
    • Gross annual income
    • Existing deduction under 80C/D


    1. Can I claim tax benefits if I3plan on constructing the house and selling it in a few years?

      If you sell the property within 5 years of possession, any tax deductions already claimed will be reversed. However the tax exemptions on interest paid will remain unchanged.

    2. Who is eligible to claim tax deductions on home loans?

      The owner of the property can claim tax benefits. If the spouse is a co-borrower, they can also file for tax deductions. In the case of a joint loan, both parties can claim for their share of the loan they pay.

    3. The property I purchased with a home loan is still under construction. Can I claim tax benefits?

      You cannot claim tax deductions till the construction is completed. Once it is completed, you can claim an aggregate of interest paid for the period prior to the year of taking possession. This can be claimed in five equal instalments from the year in which construction is completed.

    4. Can I claim tax benefits on loans from friends?

      You can claim for tax deduction under Section 24(b) only for the interest paid. The friend will have to provide you with a certificate and will be liable to pay tax on the interest earned from the loan.

    News About Tax Benifits on Home Loan

    • 100% rebate on property tax to owners who suffered in Jat Quota Stir

      Haryana government has decided to offer a rebate of 100% on property tax to property owners who have suffered property loss or damage in the Jat Quota riots. These include all commercial, residential and institutional property owners. The rebate is applicable for a period of one whole year starting from April 2016 to March 2017.

      Apart from this the Haryana State Government has already waived off electricity bills of people whose properties were affected (or looted) during the Jat quota struggle that happened in February 2016. Collection of property tax still is a huge challenge for state governments across the country. The ever-growing real estate has added fuel to this by making construction-tracking even more difficult for the tax department.

      24th June 2016

    • Form 12BB introduced to claim LTA, HRA tax rebate

      A standard Form 12BB to claim income tax rebate on LTALTC (Leave Travel Allowance Concession), HRA (House Rent Allowance) and interest towards home loans has been introduced by the income tax department. Taxpayers will have to submit proof of travel to their employers in the form in order to claim LTALTC benefits.

      In case the taxpayer is paying a rent higher than Rs.1 lakh in a year, details such as name, address and landlord’s PAN number should be provided to the CBDT (Central Board of Direct Taxes). For a claim for tax rebate on home loan interest, the lender’s name, PAN details and address have to be furnished.

      9th June 2016

    • Arun Jaitley’s Tax Expectations about Budget 2016

      Despite the fiscal front having challenges, Budget 2016 is foreseen to give tax payers some relief. Finance Minister Arun Jaitley had proclaimed more tax benefits for taxpayers in the last 2 budgets, making people expect more tax sops. Income tax exemption limit may be increased, according to analysts. This step will be taken to increase consumption. Also, more tax deductions are expected to be announced in order to encourage savings.

      One of the income tax chances that are expected by experts is the basic income tax exemption limit being increased from Rs. 2.5 lakh. It is believed that this number should be concurrent to inflation and subsequently increased automatically each year.

      6th April 2016

    • Possession norms have been relaxed for Home loans tax sop

      If the builder of your apartment has been delaying giving its possession to you, and you are worrying about experiencing a loss in the tax benefits, then the new norms as per the Union Budget 2016 puts an end to all your fears.

      Currently, the government permits a deduction, only from income of a maximum of Rs 2 lakh. This is for interest paid on a home loan availed for buying his/her own house only if he/she gets its possession within a maximum three years. This period starts as soon as the financial year in which the loan was taken ends. As per the present Union Budget 2016 this tenure has been stretched up to a period of 5 years.

      As this change has been proposed, it is expected to come into effect from April 1, 2017.

      25th March 2016

    • Tax Penalties can be because of incorrect Tax Deduction on Home Loan as well

      Personal finance experts consider taking out a home loan to purchase a house to be a smart move, unlike getting other long term liabilities.

      Cars and other such personal goods cannot be really considered as an asset, but a house can be seen as one. One of the biggest highlights is that you will be getting a tax benefit with a home loan. An exemption of up to Rs. 1.50 lakh on principal payment and Rs. 2 lakh deduction towards interest component can be availed under Section 80C of the Income Tax Act.

      14th March 2016

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