In this article I will be writing about the tax exemptions for the home improvement loans. I have written many articles related to the home loans and income tax benefits. There are two sections talking about the home loans and tax exemptions related topics. One is Section 80c (Home Loans Principal Payment) and another one is Section 28b (Home Loans Interest Payment). In my previous article I have explained in detail about the home loans taken for constructing the new house. In this article I will explore few new rules applicable for the reconstruction or home improvement loans. If you have any doubts, please post it in the comments section. If you like the article, subscribe to our future articles here.
Home Loans Articles
- Home Loans and Tax Benefits
- Tax Benefits on Home Improvement Loans
- What is Home Loans Top Up?
- Information on Home Loans
Home Improvement Loans
Typically home improvement loans are used for extending the existing homes like constructing balcony, kitchen or even you can use that money to paint your house or beatification work. It will be just work like the home loans when in the home loans you will have to work with builders here the money goes to construction contractors. To avail the home improvement loans first you have to estimate the amount required for extending the house and then submit the plans to your financier(bank). They will be verifying with the constructors about your estimation and visit your home. Some banks will sanction the loan only if you submit the receipts of payment to the contractors.
Tax Benefits on Home Improvement Loans
- The good thing is you can claim the tax benefits for home improvements loan as like the home loans.
- There is an income tax benefit on the interest component of the home improvement loan up to Rs 30,000 under Section 24 of the Income Tax Act, if it is self occupied.
- In case of the property is rented out, there is no limit on the tax deduction. For example if you have to pay the total interest on the home improvements loan as Rs.195000. The total income from the rented house is Rs.100000. Then you will be eligible for the tax deduction of Rs.95000 (195000-100000). Note that this exemption is not coming under the allowed limit of Rs.150000 for home loans interest. That is the separate component on income tax act.
In this article I have written about the home improvement loans and the tax benefits on the loans. This would help many readers to make awareness on the other areas on the home loans part. I would like to answer all your questions posted on the comments section. Thank you for the reading!!!