• Apply now

Money in bank in 24 hours

Apply now

Home Loan Tax Benefits for Under Construction Property

  • Highlights

  • Under-construction properties quote 20% less than completed ones

  • EMI payable on the loan amount would also be lesser

  • You can postpone the deduction of the interest amount

  • Save tax up to Rs. 2 lakh under Section 80EE

Purchasing a ready-to-move-in house can be an expensive affair as the prices of residential apartments are continually escalating. Saving some cash is possible, if you consider investing in an under-construction property. Generally, under-construction properties quote 20% less than completed ones. By opting for an under-construction property, you may not only be gaining monetary benefits on the cost of purchase but would also get tax benefits on your home loan.

Here are the tax benefits that you can avail when you take a home loan for an under-construction property:
1) As under-construction properties are comparatively cheaper, the funds required for them would be relatively low. Hence, the EMI payable on the loan amount would also be lesser.
2) As the EMI on the loan is quite reasonable, you can increase your monthly instalments to reduce the loan tenor. This will help you save more on your total interest payment

3) The person who is availing the home loan can postpone the deduction of the interest amount paid during the pre-construction phase.
4) The interest amount paid prior to the year of completion is accumulated and 1/5th of this amount is allowed as deduction each year for 5 years from the year of completion. Simply put, the interest paid on the home loan during the pre-construction phase can be availed for deduction in these five equal instalments. In case the property is occupied before the completion of these five years, then the deduction is limited to INR 2 lakh. This is one of the major tax benefits for under-construction property.

Also Read: Bajaj Finserv Home Construction Loan: Tax Benefits & Exemptions

Tax Benefits on a Home Loan

5) Another one of the home loan benefits for under-construction properties is that the loan is structured in a way where time of disbursement of each loan instalment by the lender will coincide with the time of completion of another level of the project by the developer.

6) One can avail tax benefits for the stamp duty and registration fee on the property.

These are some home loan interest tax exemptions for under Construction properties.

If you want to apply for a Home Construction Loan, this is the best way to get it approved.

Check your cibil score for free

The information, products, and services included in or available on bajajfinserv.in may include inaccuracies or typographical errors. Changes are periodically added to the information herein. bajajfinserv.in and/or its respective suppliers / affiliates may make improvements and/or changes on the bajajfinserv.in website at any time.
The material contained in this site and on associated web pages is general information and it is not intended to be advice on any particular matter. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. The decision with respect to any financial product or opportunity or nature or suitability or choice or the viability of any product or service shall always be sole responsibility and decision of the subscriber and user.

How would you rate this article

 Please let us know why?

What did you dislike?

What did you dislike?

What did you like?

What did you like?

What did you like?

Next Up


What is a Home Loan NOC and Why should You get It?

Subscribe Now

Subscribe Now

Subscribe to our monthly newsletter and get the latest updates

Thank you for subscribing