If you are looking to get an accurate picture of GST on home loans, you should always keep in mind factors like the GST on home loan interest and the GST on home loan EMIs. There has been a sizable effect of GST on home loans as indicated by several experts. Earlier, for home loans, service tax was charged at 15% and this has now come up to 18%. This rate will now apply for processing fees and other charges which are imposed on home loans. The processing fees are usually between 0.25-1% of the loan amount + GST which has now increased. However, GST applies only in the case of ready-to-move-in homes, and is set at 18%. In the case of under-construction homes, the slab is 12% for GST.
For Example, the impact can be understood through a common scenario. GST has now become 18% and home loan processing fees, as mentioned are between 0.25-1% of the loan amount along with GST. Suppose a loan amount of Rs. 40 lakh is taken, the processing fee will be thus Rs. 10,000 to 40,000 + service tax of 15% on the processing fee which is Rs. 1,500 to 6,000. The total thus comes to between Rs. 11,500 - 46,000. With GST being charged at 18% on the processing fee, this will come to between Rs. 1,800 to 7,200. The total payable will thus change to somewhere between Rs. 11,800 to 47,200.
Additional Read: Know about Tax Benefits on Home Loan