You must have seen those advertisements on TV about how good paint can make your home look beautiful. They focus on the pretty walls, the matching décor and furniture that complement the overall look and feel of the house. And that is when for a second, you too feel and wish that your home would also look this beautiful.
After all, a house is an asset, we like to keep it beautiful, and matching with our taste and preferences. It is also a fact that a few years after buying the house, it may need some renovation and repair. If repair costs are manageable, then it’s fine, but there are times when a complete renovation may be needed to be done.
The costs of completely renovating the entire house may run up to a few lakhs. And you may not always have enough funds to bear such huge costs. That’s when a home renovation loan comes into play.
While you may feel that a home renovation loan involves outflow of money with the repayments and interest, did you know that this renovation loan that you avail can help you save tax?
This is what you need to know:
For a self-occupied house, if you have taken a home renovation loan, you can claim a deduction on the interest component under section 24 of Income Tax Act, 1961 on the interest payment made for a home renovation loan in a year. The deduction amount for the self-occupied property is capped at Rs. 30,000 a year. In case your property is rented, then full interest is allowed for renovation, which means if the interest is paid for the renovation of a rented house, the whole of the interest shall be allowed as deduction.
To avail such tax benefits, however, you must keep the invoices and bills incurred towards this renovation cost as proof for claiming tax benefit. In the case of a self-occupied house, if repairs are of capital expenditure in nature (major repairs), such renovation cost can be considered as a ‘cost of improvement’ for that particular property. This, in turn, will help bring down the taxable capital gains if the property is ever sold in the future.
The cost of the renovation is reduced from taxable capital gains, which means the original renovation cost is adjusted for the price of inflation and that helps reduce your tax liability.
If this sounds like a good deal to you and want to avail a home renovation loan, then NBFCs like Tata Capital, can help you.
Renovate to make it new
Like a personal loan, a home renovation loan’s mainpurpose is, of course, renovating a house. Once the money is disbursed to your account, there is no restriction on how you use the fund. You may use it for basic repair work, or even use it to buy a queen-sized bed for the master bedroom, or maybe a huge LED TV for your living area, or perhaps get a recliner to relax and watch TV.
At Tata Capital, your can borrow home renovation loans up to Rs 25 lakhs at reasonable rate of interest. It is a collateral-free loan so you don’t even need any security.
Sometimes it not just about renovating. If you live in a joint family you would want to make sure that there is enough place for one and all. This would mean either move to a bigger place or extend the existing home by purchasing the apartment next door. If buying a new home is not on the plan then you should consider to construct an extra room for your about-to-be-married son, or extend the balcony on to a hanging terrace. For this kind of work, you can always apply for a home extension loan.
A home extension loan is just like a home loan with which you can make major construction in your house, as well as enjoy all the tax benefits of a home loan. With Tata Capital, your home extension loan can usually start at just 9.6 per cent interest, with minimal processing fee so it doesn’t burn a big hole in your pocket. What’s more, with their Flexi EMI option you can repay this loan over five years at peace and your convenince.
Be it renovation or extension, Tata Capital has the right loan for your needs. Know more about Home Extension Loan by Tata Capital.