Purchasing a new home is a dream for many, but it can be tough on the pockets as real estate prices are continually increasing. That is why most people opt for home loans to enjoy a smooth process of moving into their new homes, as today, the house loan rates are highly affordable and come with additional benefits. Also, there are several income tax benefits on home loans that one can avail of, making them a popular way to finance the purchase of properties. 

Apart from income tax rebates on home loans, another way to reduce the financial burden of purchasing a house of your own is by availing of an under-construction home loan with tax benefits. Investing in an under-construction property can help you retain some cash, as there are a few tax exemptions you can apply for after acquiring the entirely constructed house. Besides, under-construction houses generally quote a lower price than constructed ones.

Here’s how you can avail of home loan tax benefits for under-construction property.

Tax deductions on under-construction property

If you purchase an under-construction property by taking a home loan, you can avail of home loan tax benefits for under-construction property.

Suppose you buy a property that is being constructed and are currently paying the EMIs for the loan. In that case, you can claim tax deductions on the principal amount (up to Rs. 1.5 lakhs) under Section 80C of the Income Tax Act, 1961.

Also, apart from deductions on the principal amount, you can also claim tax benefits on your home loan rate payments. 

Additional Read: Can I Claim Income Tax Exemption on Loan Taken for Under-Construction Property?

Tax deductions on interest paid pre-possession of the property

Taking a house loan to purchase your dream home is now more convenient than ever, as you also get exemptions for interest on housing loans under Section 24 of the Income Tax Act. Combined with tax exemptions on the principal amount, a home loan for under-construction property makes your dream house more affordable. 

Yes, you can claim deductions on the interest paid on the house loan before possession, albeit after the construction is complete and the property is ready for occupancy. If the construction is still underway or you use the loan to purchase a plot, you cannot claim any exemption for interest on a housing loan. Section 24 also puts a limit on benefits you can claim, and you can only claim an amount of up to Rs. 2,00,000 in this case.

Meanwhile, the interest you pay before possession gets accumulated. Once you claim a tax exemption on this interest, you can reclaim this amount in five installments after the construction is completed. To have an exact estimate of this amount, you can use a home loan EMI calculator online.

Additional Read: Which one is better? Under- Construction or Ready-to-Move-In House

Tax benefits on stamp duty

You can claim an income tax rebate on home loan on the amount paid towards stamp duty and registration charges under section 80C of the ITA. However, the benefit is only available after the construction has been completed and you are in possession of the property.

Additionally, if the property you are purchasing has a stamp duty under Rs. 45 lakhs, you can also avail of a tax deduction of up to Rs. 1.5 lakhs for interest paid on the loan. This provision is available to homeowners under section 80 EEA of the Income Tax Act.

Nowadays, several targeted home loan calculators are available to keep you abreast of all the rates and charges involved in a loan. Therefore, you can stay aware of the costs and choose wisely.

Income tax benefit on home loan’s interest in the pre-construction period

As you know, Section 24 of the Income Tax Act allows you tax benefits on interest paid on home loans, but only after the construction is complete. However, home buyers claim benefits on interest paid even in the pre-construction period under special circumstances.

The Section 80EEA of the Income Tax Act allows you to claim a deduction on interest paid on a housing loan up to Rs. 1,50,000 regardless of the restrictions of Section 24, given you fulfil the following conditions:

• Your housing loan was sanctioned during the period starting between 1st April 2019 and 31st March 2022.
• The residential house property’s stamp value does not exceed ₹45 lakh.
• You do not own any residential house property on the date of sanction of the loan.

If you tick all the above boxes, your home loan on the under-construction property will be much more affordable. You would be eligible for income tax benefits on the home loan’s interest even before the construction is complete. 

Wrapping up

There are various income tax benefits on home loans for under-construction property. So, if you’re planning to construct a home, then make sure to check your home loan eligibility and reach out to Tata Capital for a quick loan. We offer home loans at some of the most competitive interest rates and flexible tenure.

Apart from this, you can use our home loan eligibility calculator to enhance your eligibility parameters. Visit Tata Capital website and apply for home loans online, right from your home. Enjoy a quick disbursal and hassle-free documentation process with us and move into your dream home without any delay!

Every year before the union budget is presented, prospective home buyers and real estate players anticipate reforms and rebate. This year, the expectations were exceedingly high for to-be homeowners who were awaiting some respite after a pandemic-struck 2020. With India’s budget 2021 on the floor, a slew of measures graced home buyers and the realty sector.

From income tax relief to affordable housing initiatives, here are the things that will impact your goal of renting or buying a house in 2021:

Tax deduction

If you are looking to purchase a house in 2021, you will be able to avail an extra income tax deduction of Rs 1.5 lakhs. In the budget, the government has extended the provision by another year to 2021-2022. Your property investment will bear you a yearly tax-deductible investment of Rs 3.5 lakhs, owing to this amendment.

The deduction announced first in the July 2019 budget, is applicable on home finance for affordable housing. Properties worth less than Rs 45 lakh belong to the affordable housing category.

A surge in demand and loan benefits

Realty consultants and real estate developers suggest that tax exemption (up to Rs. 3.5 lakhs) on affordable housing projects will significantly boost demand for residential dwelling units in a post-pandemic market.

Tax holiday period and affordable housing prices

The central government has provisioned a tax holiday, i.e., tax reduction or elimination by another year, for affordable housing realty developers in budget 2021. For homebuyers, this is good news too, as the builders will now be able to finish their projects faster.

Custom duty on iron and steel

If you wonder how relaxed custom duty on metals like steel and iron aid your home purchase, think again. The lowered duty will extensively trim down the expenditure developers may incur on imported material used in construction. With real estate builders benefitting from the move, the home prices will also reduce quickly. 

To sum up

The tax deduction, loan benefits, and affordable housing incentives are a substantial relief for the real-estate sector, which was significantly impacted by the pandemic. The advantages are also aplenty for homebuyers who can purchase their dream home without drilling a hole in their pocket or denting their savings.

So, if you are scouting the market for a housing loan provider that offers one of the best home loan interest rates, your search ends at Tata Capital. Avail the best home loan offerings at flexible repayment terms and minimal documentation from us.

Further, once you have a clear-cut idea of the total home buying expenditures you can afford, use an online home loan EMI calculator to navigate your future monthly instalments with us.

Connect with Tata Capital today, and let your transition to a new home be a smooth one.

There’s nothing more enthralling for an aspiring homeowner than watching their house getting constructed; every brick and every stone turning into their dream home.

However, the exciting journey also entails a momentous amount of time, money, and coordination. Breathing some relief into such a project are home construction loans. The loans are customised specifically for financing expenses associated with the arduous process.

What is home construction finance?

While some opt for purchasing a fully-constructed ready-made house, others invest in constructing a home in ways they deem fit. Nowadays, you can get home construction financing to bear the expense incurred in building a new house. Unlike home loans, these carry a shorter tenure, and the amount is disbursed in various instalments depending on your construction work’s progress.

The significant difference between typical home loan and a house construction loan is the incremental disbursal of money. This unique feature allows you to request loan disbursal whenever the construction stage requires funds.

This way, borrowers don’t have to undergo the hassle of managing large amounts, and they get to focus on their dream house project. Besides, you only pay interest on the used funds instead of the entire pre-sanctioned amount.

Additional Read: Home Loan vs. Home Construction Loan

What are the eligibility criteria for availing a house construction loan?

Much like home finance, you must fulfil necessary home construction loan eligibility conditions set by various financial institutions.

Before sanctioning a construction loan, lenders usually ask for a detailed home construction plan, including the prospective materials to be utilised during the building process. 

Other eligibility criteria include parameters like a good credit score, proof of annual/monthly income, work experience, job stability, etc. Furthermore, some lenders also expect that if the property in use is co-owned, then the co-owner must be a loan co-applicant. Here’s a guide to understanding the eligibility criteria in detail.

Work:

Both salaried and self-employed professionals are typically eligible for availing a loan. Salaried individuals may require a work experience of two years, and self-employed should have experience of three years.

Age limit:

Like home loan eligibility, people falling in the age between 24 and 65 are typically eligible to avail home construction finance from lenders.

Credit Score:

A healthy credit score is pivotal to your loan application. Customers who have a credit score of 750 or more can easily avail a home building loan, provided other criteria are also matched.

Apart from these, you will also need to furnish documentation from your end as proof of income, identity, and residence. Moreover, borrowers must furnish land ownership documents, NOC from concerned authorities, estimated construction cost quotation, construction plan, and approved blueprints. Besides, to determine house construction loan interest rates, your lender may ask for more documents.

Additional Read: Home Construction Loan: Everything You Must Know

Wind-up

Nobody said building a house was easy, but who says financing it should not be? Whether a sleek contemporary design is on your mind or a Victorian outline, let Tata Capital back your construction with an easy house building loan.

Experience hassle-free processing and quick disbursal of funds with us today!

The Tamil Nadu Housing Board, known as the City Improvement Trust of Chennai before 1961, is a body that caters to the housing needs of the economically weaker sections of society and the lower-income group. Under the TN Housing Board scheme, this authority constructs affordable residential and commercial spaces for people falling under various income groups and auctions them off.

The salient features of this scheme include the availability of various amenities like commercial complexes and schools nearby. This is one of the most beneficial housing schemes. The properties are priced according to the locality you are eligible for, and certain plots are also reserved for defence personnel and government servants.

Additional Read: Home Loan in Chennai

The objectives of the TN housing board

As a matter of policy, the TN housing board is committed to ensuring high-quality materials in their projects, using the latest modern techniques in the construction, and providing shelter to the people in need. The board offers affordable housing to Tamil Nadu citizens who come under EWS (Economically Weaker Section), Lower Income Group (LIG), Middle Income Group (MIG) and Higher Income Group (HIG), at different price ranges.

What’s more, TNHB has the unique vision of providing housing for all. It aims to develop very large neighbourhood schemes where each construction project remains a self-contained neighbourhood by itself.

Let us now explore the TNHB’s sub-schemes, eligibility criteria, and application procedures.

Tamil Nadu Housing Board’s (TNHB) ongoing sub-schemes

Various sub-schemes, as mentioned below, are ongoing under the Tamil Nadu Housing Board within different parts of the state. Beneficiaries are selected after the draw of lots. Then, they can avail of home loans under these schemes through authoritative bodies like the housing board in Chennai,Thanjavur, and Trichy.

1. Thanjavur Housing Division

This government housing scheme in Tamil Nadu offers multiple units under various housing schemes. These include Tamil University Campus Self Finance Scheme, Thanjavur Scheme, Pattukottai Self Finance Scheme, and more.

2. Besant Nagar, Chennai

Under this division, the scheme offers flats by a drawing of lots. The localities in the purview of the housing board Chennai include Indra Nagar and Sholinganallur, where 60 and 280 units are available respectively.

3. Trichy Housing Division

Dedicated to offering shops and commercial units, the plots under this scheme are open for auction in Valavanthankottai, Navalpattu and Pudukottai.

TN Housing Schemes eligibility criteria

Many lenders offer a home loan eligibility calculator on their websites, using which you can check your eligibility in advance and make better financial decisions. The eligibility criteria for the TN housing board schemes and sub-schemes are as follows:

• The applicant must be more than 21 years old.
• The applicants must be salaried individuals and have a stable income.
• The applicants must be natives of Tamil Nadu.
• The applicants must not be the owner of any other property under any other government scheme.

Apart from this, make sure that you also fulfill the home loan eligibility before applying for a loan. You can use a home loan eligibility calculator on your lender’s website.

How to apply for government house schemes in Tamil Nadu

To apply for a house under this scheme, you must buy the application form and submit it with the demand draft before the due date. To purchase and deposit the form, you can visit the city division or Mofussil unit. You can also read application details on the official Tamil Nadu housing board website.

For filling up the application, follow the instructions and guidelines printed in the application form.

After filling out the form, you must register the application form with the respective Division office or Unit office on payment of the prescribed registration fee. Currently, you can make the payment either by cash or by demand draft. Make sure you complete the payment on or before the due date indicated in the application form.

Next, you may choose to finance the purchase by availing a housing loan. You can use the home loan EMI calculator on your lender’s website to be aware of the EMIs in advance. Doing so will help you plan your repayment and avoid missed payments and hefty penalty charges.

To sum up

Before taking a loan, make sure to check the home loan EMI rates. You can do so by visiting the Tata Capital website and entering your loan details to get an exact estimate of the EMIs payable.

Are you looking to avail of the special TN Housing Scheme and purchase a home? Then, Tata Capital is here to relieve your financial stress with our affordable home loan interest rates, starting at 6.90%.  Reach out to us and avail of the most competitive offers, interest rates, and added benefits like the home loan calculator for utmost transparency.

So, visit our website to learn more about our attractive home loan interest rates and apply online.

Be it a studio apartment or a lavish bungalow, owning a home is a dream come true for most of us. Besides financial security, your abode provides a safe haven.

However, with ever-increasing property prices, it has become relatively challenging for first-time homebuyers to purchase a house. This is why the Indian Government has introduced many government housing schemes to provide affordable housing to citizens in need.

Not just the Central Government, various state governments have also participated in the ‘Housing for all’ initiative, and have launched several state housing schemes.

These projects allow homebuyers to get subsidies on home loan interest rates, thus reducing their overall EMI amounts in the long run.

If you’re a potential first-time homeowner, here are 5 reasons why it’s smart to invest in a government-backed housing scheme.

Subsidized interest rates

Almost all government housing projects provide subsidies on home loan rates, effectively reducing the overall amount of your monthly instalments. For instance, under the Pradhan Mantri Awas Yojana Scheme, borrowers can get an interest rate subsidy up to 6.5% for a 20-year loan tenure.

However, to avail these benefits, you must meet the scheme’s home loan eligibilitycriteria. As most of these ventures are meant for first-time homeowners, you should make sure that you haven’t owned or are currently in ownership of a property before applying.

Lower price

Apart from subsidies, government projects like PMAY or DDA Housing Schemeprovide homes at lower-than-usual prices. Because government authorities aren’t inclined towards profit churning, thus making it easier for them to offer homes at an affordable price tag.

Moreover, these housing projects are often constructed in places, which aren’t owned by any private developer, thereby allowing authorities to undertake them at attractive, well-connected locations.

Additional Read: How to Complete your Dream of Owning a House Using PMAY

Safe Investment

Apart from having the location and affordability advantage, investing in government-led housing schemes is also a secure option, as these projects stringently follow legal requirements in all aspects.

Timely possession

Unlike private projects, where a builder may take years to give possession, government-led housing projects offer greater assurance when it comes to timely delivery.

Affordable housing for “all”

The best part about investing in government-backed subsidy schemes is that they aren’t limited to a specific demographic. Whether you belong to an Economically Weaker Section (EWS) or a High-Income Group (HIG), these schemes ensure that all eligible first-time homebuyers can purchase and live in their dream house.

Additional Read: Affordable Housing Loan with Tata Capital

Final thoughts

Are you looking to purchase a home under a subsidy scheme but are falling short on finances? Don’t fret! Tata Capital can help you out. We offer a hassle-free housing loan application process that requires minimal documentation.

Our affordable interest rates and flexible tenure will bring you closer to your dream home. Before applying, we recommend you visit our website and use our home loan EMI calculator to figure out your monthly installment amount.

So, what are you waiting for? Check your eligibility using our home loan eligibility calculator and apply for home loan with us today!

As the union budget was unveiled on February 1, 2021, affordable housing, tax exemption on home loan interest rates, tax holiday for realty developers, and rental housing remained the key focus areas. The Central Government has taken these measures to encourage citizens to invest in affordable houses.

So, if you are planning to buy a house on loan, here is a guide to understanding various home loan tax benefits 2021 has in store for you.

Additional tax benefit in 2021

In her budget speech, Finance Minister Nirmala Sitharaman proposed extending tax deduction on home finance under the affordable housing scheme for another year till March 31^st, 2022. Focusing on ‘Housing for All’, the tax holiday on affordable housing projects and an additional income tax rebate on home loan 2021 is in place now. The rebate, effective from April 1, 2021, allows a tax deduction of Rs 1.5 lakhs on home finance for first-time homebuyers.

This exemption is offered on top of the Rs 2 lakh deduction available on housing loan interest payment subject to specific terms. Thus, the total housing loan tax exemption 2021 for an individual taxpayer on the interest payment for purchasing an affordable house is Rs 3.5 lakhs annually.

Experts say that these measures can increase the demand for affordable properties amid the lower income groups.

Home finance taxation- a brief history

The taxpayer who has availed a home loan will now receive an additional deduction on the interest component. Under Section 24(1), home loan borrowers are permitted to claim a deduction worth Rs 2 lakhs. Last year, the government introduced the Section 80 (EEA) for providing extra tax deduction of Rs 1.5 lakh to first-time homeowners and the benefits were valid up to March 31, 2021.

Additional Read: Home Loan Tax Benefits Explaining Section 80EEA, 24 and 80C

Who is eligible for the tax benefits?

For availing the tax exemption, prospective homeowners must fulfil the following conditions:

• The residential property’s total stamp duty value should not go beyond Rs 45 lakhs.
• The taxpayer must not already own a house property (residential) on the loan sanction date.
• Borrowers can claim exemptions on home financeinterest payment only.
• If a housing loan is availed jointly by the property’s co-owners, each borrower can request deduction up to Rs 2 lakhs each along with the principal repayment of up to Rs 1.5 lakhs.
• The benefits apply to first-time homebuyers opting for a home under the government’s Affordable Housing Scheme.

Additional Read: Everything You Need to Know About Tax Benefit on Home Loans

Parting thoughts

In 2020, life took a dramatic turn, and financial constraints put off house purchases for many people. However, with tax deduction support from the government and easy housing finance options by Tata Capital, give your home buying journey a head-start.

Trust us for relaxed home loan eligibility criteria, attractive interest rates, and flexible tenures. For more information, get in touch today!