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 not only gain monetary benefits on the cost of purchase but tax benefits on your home loan as well.
Here are the tax benefits that you can avail yourself 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 economical.
2. The EMI on loan is quite reasonable, as you can increase your monthly instalments to reduce the loan tenor. This will help you save more on your total payable interest.
3. The person who avails of the home loan can postpone the deduction of the interest amount paid during the pre-construction phase if required.
4. The interest paid on the home loan during the pre-construction phase can be availed of for deduction in five equal annual instalments. If the property is occupied before the completion of these five years, then the deduction is limited to Rs. 2 lakh. This is one of the significant tax benefits for under-construction properties.
5. One can also avail of tax benefits for the stamp duty and registration fee on the property.
Now that you know of the tax exemptions on home loans for under-construction properties, make an informed decision when choosing your lender. Bajaj Finserv, one of the most trusted lenders in the country, offers home loans at attractive terms and flexible repayment plans.
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