Advocate Jasmeet Singh Hora

Questions Answered by Advocate Jasmeet Singh Hora

Q: Can I get rebate on loans in income tax.

Currently i am having two housing loans :--- 1.flat loan from sbi 2.plot loan from lichfl. Can i get rebate on both loans in income tax.

Advocate Jasmeet Singh Hora answered
You can only avail tax exemption on your Flat Loan from SBI & no exemption on your plot loan from LICHFL. Borrowers can avail tax exemption on a plot loan only after completion of construction. No tax benefit can be claimed for the period before completion, unlike a home loan where interest charged during the under-construction period can be claimed in five years, post completion, subject to the overall limit.The tax deductions will be applicable only in the year in which the construction is completed. The principal repayment you make on your home loan is eligible for income deduction under Section 80C upto Rs. 1,50,000/Year.Under Section 24, if your house is self-occupied, the maximum amount of interest that can be deducted from your income is Rs 1,50,000/Year. "Borrowers must ensure that they construct the houses as per building plan only. Any non-compoundable deviations may lead to difficulty in availing fresh loans later. Secondly, once the construction is completed, remember to submit copies of the completion certificate or occupation certificate to the bank so that the plot loan can be converted into regular home loan and borrower can avail income tax benefit. But, if you take a loan for construction, that means a loan to build a house on that plot of land, then you can get a tax break.In such a case, the tax benefits are available on both portions of the loan ? the one to purchase the plot and the one taken to construct the house thereon. Let's say you took a Rs 5,00,000 loan to buy a plot of land and a year later you took a Rs 3,00,000 loan to construct. Now the total amount will be combined and you will get the tax benefit on the entire amount.