What are the tax benefits available under a home construction loan?

The following tax benefits are available: You can claim the principal component of your home construction loan as tax deductions under section 80C of the Income Tax Act. The maximum deduction allowed in a financial year is Rs. 1.5 lakh You can claim the interest component of your home construction loan as tax deductions under section 24 of the Income Tax Act. The maximum deduction allowed in a financial year is Rs. 2 lakh for a self-occupied property. However, to claim this deduction, you are required to finish the construction of your house within five years If you’re a first-time homebuyer, you can claim an additional tax deduction of Rs. 50,000 under section 80EE, given that the value of the property is less than Rs. 50 lakh

What documents are needed to apply for a home construction loan?

At Tata Capital, we offer home construction loans with the bare minimum of paperwork. Below is the list of documents required to apply for a self-construction loan with us: Age proof – A copy of the passport, driving license, birth certificate, PAN card, or school leaving certificate Photo identity proof – A copy of the voter ID card, Aadhaar card, passport, or driving license Income proof – Salary slips, bank statements, or Form 16 A legal approval for construction from the Municipal Corporation A construction blueprint authorized by an architect or a civil engineer Proof of land purchase A processing fee cheque

Is construction loan and home loan the same?

No. Although a home loan and a construction loan sound similar, they are two completely different products. The table below illustrates the differences between them: Parameter Home Loan Home Construction Loan Purpose Taken for buying a ready-to-move-in or an under-construction housing property. Taken for buying a plot of land and constructing a house on it. Interest rate Interest rates are lower. Interest rates are higher than home loans. Eligibility & documents Lenders ask for basic eligibility and minimal documents. Lenders require additional documentation and eligibility. Loan tenure Comes with high loan tenures of up to 30 years. Loan tenure usually ranges between 10 to 15 years. Availability Available offline as well as online. Usually not available online as they involve extensive paperwork. Disbursal The entire loan amount is disbursed in a single installment unless the loan is taken for an under-construction property. The loan amount is usually disbursed in several installments as the construction reaches specified stages.

Home
Home Loan
Self Construction

Home Construction Loan

Get Home Loan for Construction Up to ₹ 5 Crore*

Instead of buying a ready-to-move-in house, you can choose to purchase a piece of land and construct your house on it brick by brick. A home loan for self-construction or simply a home construction loan is a special type of home loan given to help borrowers construct their own house on a piece of land or plot.

With Tata Capital Home Loan Finance, you can get a plot loan of up to Rs. 5 crores at affordable interest rates, starting from just 7.75% per annum*. A home construction loan can help you meet all your financial requirements for the construction of your house, be it for buying a plot, procuring raw materials, and paying for the masonry work, among others.

Loan amount offered

₹ 5 lakhs to ₹ 5 crores*

Loan tenure

Upto 30 years

Interest rate starting @

7.75%* p.a.

View Rates & Charges

Advantages of Tata Capital Home Construction Loan

Loan for Land Purchase Through Direct Allotment/Resale

It is the best option for those who seek to buy a residential plot and construct a house on the same plot. You can use this loan to purchase a plot through direct allotment or resale.

Attractive Interest Rates

You can avail of a Tata Capital Plot Loan at an attractive interest rate, starting from just 7.75% per annum*. It can make the construction of your dream home much more affordable.

Balance Transfer Facility

You can also apply for a Tata Capital Land Loan to transfer your outstanding house construction loan balance from another lender. With reduced land loan interest rates, we can help you lessen your EMI burden significantly.

Easy Eligibility Criteria

With Tata Capital Plot Loan, you can get access to finances by meeting simple eligibility criteria. Furthermore, our plot loans involve instant approval and quick processing so that you can start the construction of your dream house as soon as possible.

Instant Approval

We provide instant approval for home construction loans. We ensure that you don’t have to wait for long to buy a plot and start the construction of your dream house.

Quick Processing

Tata Capital Plot and Construction Loans are processed and disbursed quickly. After submitting your land loan application and required documents, you can get the loan amount within three to five working days, subject to successful verification.

*The maximum loan amount offered may increase on a case-by-case basis, depending on individual eligibility and in accordance with our approved policy.

Avail TATA Capital loans directly from WhatsApp

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Eligibility Criteria for Home Construction Loan

To avail of a house construction loan from Tata Capital, you will need to fulfill our simple eligibility criteria. Your home construction loan eligibility would depend on some basic factors, including:

You should be aged between 24 to 65 years

Salaried employees should have a minimum salary of Rs. 30,000 per month and at least two years of work experience

Self-employed individuals should have a business vintage of at least three years

In the case of NRIs, they should have a minimum work experience of three years

Loan Against Securities Documents Required

Documents Required for House Construction Financing

Here’s a list of documents required for a house construction loan

Duly signed application form with photograph
Proof of identity, address and age
Bank statements for the last six months
Salary slips for the last three months
Processing fee cheque
Form 16/Income tax returns

Here’s a list of documents required for a house construction loan:

Duly signed application form with photograph
Proof of identity, address and age
Bank statements for the last six months
Processing fee cheque
Form 16/Income tax returns
Proof of business existence
Education qualification certificate and proof of business existence
Income Tax Returns (ITR) of last 3 years with computation of income
Last 3 years CA certified/audited Balance Sheets and Profit & Loss Statements

Here’s a list of documents required for a house construction loan:

Duly signed application form with photograph
Proof of identity, address and age
Bank statements for the last six months
Processing fee cheque
Form 16/Income tax returns
Proof of business existence
Business profile
Income Tax Returns (ITR) of last 3 years with computation of income
Last 3 years CA certified/audited Balance Sheets and Profit & Loss Statements

What is the difference between a home loan and a construction loan?

Home loans and home construction loans are the two most common housing finance options available in India. Both these loans are meant to provide financial assistance to those looking to own a housing property for residential or investment purposes. However, homebuyers often get confused between these two loan options. Although both home loans and home construction loans sound similar, they are vastly different from each other.
Below is a detailed comparison of home loans vs. construction loans.

Purpose

The primary difference between the two products is the purpose for which they are taken. A home loan is taken to buy a new flat, apartment, or villa. It can be a ready-to-move-in house or an under-construction property. On the other hand, a self-construction loan is taken to construct a house, building, or apartment on a piece of plot. It can also be used to buy a plot of land and then construct a house on it.

Interest rate

An important thing to note is that not all lenders in India offer home construction loans. And those who do typically charge a higher interest rate. On the other hand, home loan interest rates are usually on the lower side. However, with Tata Capital, you can get a loan to construct your dream home at a competitive interest rate, starting from just 7.75% per annum.

Loan tenure

Home loans are usually high-value loans, and hence, their tenures are also on the higher side. Home loan tenures can extend up to 30 years in India. On the other hand, home construction loans are generally available for shorter tenures, ranging between 10 to 15 years. However, with Tata Capital, you can choose a tenure of up to 30 years for your home construction mortgage.

Eligibility criteria

The eligibility criteria for availing of the two types of loans are different from each other. Lenders usually provide home loans with simple eligibility criteria based on the applicant’s age, monthly income, credit score, etc. Even people belonging to the low-income category can apply for home loans. However, home construction mortgage entails detailed eligibility requirements and are generally available to those who already own a plot of land.

Documentation

Lenders usually ask for some basic documents for providing home loans, including PAN card, Aadhaar card, income proof, and property papers. But in the case of a house construction loan, they may ask for some additional documents, such as legal approval for construction from the Municipal Corporation, an architect-authorized construction blueprint, proof of land purchase, etc.

Availability

Home loans are available offline as well as online. You can simply visit a lender’s website and apply for home loan online by uploading the required documents. It may take a few days to verify your application and transfer the loan amount. However, the process of getting a home building loan is a bit complicated. They are usually not available online since they involve extensive paperwork. At Tata Capital, we allow you to apply for a construction loan with minimum hassles.

Loan disbursal

This is the final point of difference with respect to home loans vs. construction loans. A home loan is usually disbursed within a few working days. The lender may transfer the loan amount directly to you or the builder. Until it’s taken for an under-construction property, the entire loan amount is disbursed in a single installment. On the other hand, home construction loans are usually disbursed in multiple installments based on the construction speed of your house.

How to Apply for a House Construction Loan?

To apply for a house construction loan online, follow the steps below:

Step 1: Navigate to the official Tata Capital website and click ‘Apply’ on the top right corner of your screen.
Step 2: If you’re a new customer, fill in some basic personal details. If you’re an existing customer, simply enter your mobile number and fill in the OTP you receive.
Step 3: Follow the instructions mentioned on your screen and upload all necessary documents.
Step 4: Once your application is approved, you’ll receive the loan amount.

You can apply for a house construction loan offline as well. Here are the steps:

Step 1: Visit your nearest Tata Capital branch.
Step 2: Complete the application process as directed by our executives.
Step 3: You will be notified once your application is approved.

Popular FAQs

A plot and construction loan is given specifically for the construction of a housing property on a piece of plot or land. You can take this loan to meet A-Z expenses for the construction of a house or building for residential or investment purposes. You can also take a plot and construction loan to buy a piece of a plot through direct allotment or resale. At Tata Capital, we provide plot loans of up to Rs. 5 crores at highly competitive interest rates.

No. Unfortunately, a home construction loan is available only for those who seek to construct a residential building or a housing property on a plot of land. This type of loan cannot be used for buying or constructing commercial properties. However, you can avail of a it to construct a housing property for investment.

With Tata Capital, you can get a plot loan of up to Rs. 5 crores at a highly competitive interest rate. However, the maximum loan amount that you can borrow depends on several factors, such as your age, monthly income, credit score , and the plot’s market value. We provide financing of up to 80% of the market price of a plot of land.

The interest rates for home construction loans in India usually range between 10 to 14% per annum. However, at Tata Capital, we provide them at the most affordable interest rates, starting from just 7.75% per annum. You can secure the best deal on interest rates based on your age, monthly income, and credit score, among other factors.

The following tax benefits are available:

You can claim the principal component of your home construction loan as tax deductions under section 80C of the Income Tax Act. The maximum deduction allowed in a financial year is Rs. 1.5 lakh
You can claim the interest component of your home construction loan as tax deductions under section 24 of the Income Tax Act. The maximum deduction allowed in a financial year is Rs. 2 lakh for a self-occupied property. However, to claim this deduction, you are required to finish the construction of your house within five years
If you’re a first-time homebuyer, you can claim an additional tax deduction of Rs. 50,000 under section 80EE, given that the value of the property is less than Rs. 50 lakh

At Tata Capital, we offer home construction loans with the bare minimum of paperwork. Below is the list of documents required to apply for a self-construction loan with us:

Age proof – A copy of the passport, driving license, birth certificate, PAN card, or school leaving certificate
Photo identity proof – A copy of the voter ID card, Aadhaar card, passport, or driving license
Income proof – Salary slips, bank statements, or Form 16
A legal approval for construction from the Municipal Corporation
A construction blueprint authorized by an architect or a civil engineer
Proof of land purchase
A processing fee cheque

Yes. You can apply for a plot and construction loan individually or jointly with your spouse, child, sibling, etc. In the case of a joint loan, both borrowers have to be the co-owner of the property. At Tata Capital, we offer special benefits for women co-borrowers, such as reduced interest rates, higher loan amounts, etc.

The lender may disburse the loan amount in three to five installments as per the demand of the construction stage. Usually, the lender releases the next installment only after inspecting the construction site and making sure that it’s progressing as per the initial plan. In some cases, it levies a penalty on the borrower if they fail to complete their construction on time.

No. Although a home loan and a construction loan sound similar, they are two completely different products. The table below illustrates the differences between them:

Parameter	Home Loan	Home Construction Loan
Purpose	Taken for buying a ready-to-move-in or an under-construction housing property.	Taken for buying a plot of land and constructing a house on it.
Interest rate	Interest rates are lower.	Interest rates are higher than home loans.
Eligibility & documents	Lenders ask for basic eligibility and minimal documents.	Lenders require additional documentation and eligibility.
Loan tenure	Comes with high loan tenures of up to 30 years.	Loan tenure usually ranges between 10 to 15 years.
Availability	Available offline as well as online.	Usually not available online as they involve extensive paperwork.
Disbursal	The entire loan amount is disbursed in a single installment unless the loan is taken for an under-construction property.	The loan amount is usually disbursed in several installments as the construction reaches specified stages.

Yes. Some lenders mandatorily ask for a construction plan approved by a civil engineer or an architect for providing self-construction loans. With Tata Capital, you can get a plot and construction loan with minimal documentation.

Yes. You can get a construction loan for buying a plot of land or constructing a house on a plot located outside of your resident city or state. At Tata Capital, we provide construction loans of up to Rs. 5 crores with simple eligibility requirements.

Lenders usually charge a one-time processing fee of 1-3% on home construction loans. At Tata Capital, we provide home construction mortgage with a very nominal processing charge of 0.5% of the loan amount.

Yes. If your home construction loans seem inadequate to meet your financial requirements, you can apply for a top-up loan. However, the approval of your top-up loan application is at the sole discretion of the lender.

Lenders disburse construction loans in phases after the construction reaches certain stages. In case a borrower doesn’t commence the construction within the stipulated time after taking a construction loan, the lender can stop all further disbursals and levy a hefty penalty on them. The lender may also convert the construction loan into a normal loan and increase the applicable rate of interest.

While applying for a home construction loan, choosing the right tenure or repayment period is crucial. It is the duration for which you will be required to pay Equated Monthly Installments (EMIs) to your lender to repay the loan amount. This period can be mentioned in months or years. If you wish to pay lower EMIs, you can choose to spread your repayment over a longer tenure. However, the longer your loan repayment tenure is, the higher will be your interest outgo.

At Tata Capital, we allow you to choose an appropriate period for the repayment of your self-construction loan. Our loan tenure ranges between 5 to 30 years. You can consider factors such as your monthly income, existing financial liabilities, risk tolerance, etc., while choosing your loan tenure. You can also use a home loan EMI calculator to evaluate the EMIs that you would have to pay, and choose your loan tenure accordingly.

More Home Loan Products for You

Home Loan for government employees

With Tata Capital, you can apply for a home loan for government employees in a few easy steps and get housing finance at competitive interest rates.

Apply Now

Home Loan for self-employed

With Tata Capital, you can apply for a home loan for self employed in a few easy steps and get housing finance at competitive interest rates.

Apply Now

Home Loan for women

With Tata Capital, you can apply for a home loan for women in a few easy steps and get housing finance at competitive interest rates.

Apply Now

What Our Customers Say About Us

Service provided by Manoj Patel in Surat vesu Branch was helpful and because of his support we were able to close loan.

Prakash Patil

Home Loan | 23 Aug, 2024

Excellent A1 Services. The Lady at the Customer Desk is very Cooperative and helpful so that my work completed without the time frame. The name of the Lady is Amruta Pathak. God bless her and her family. Thanks and Regards for the entire team of Tata Capital.

Nandlal Lal Arora

Home Loan | 13 Aug, 2024

Very good & prompt service, and we have spoken to Mr. Manish also, and he always helps us to provide our request. Thank you, Ms Apurva Shende & Manish Padwal

Farhang Ahmed Azar

Home Loan | 24 Jul, 2024

I'm happy with the service and the help I got earlier for foreclosure letter. Thank you so much & thanks to Alisha mam for her guidance.

Akshay Anil Pawar

Home Loan | 17 Jul, 2024

Special thanks to Mr. Avinash for his help rendered with full commitment to his job, answering the queries to me clearly, and follow up so that the work is done in given time to get customer satisfaction.

Hannah Grace

Home Loan | 02 Jul, 2024

Mr Avinash who handled my case is well experienced and has courtesy for customers' concerns. However, some of the Tata Capital products are very expensive when compared to other banks' ones!

Mohammed Shakeel Urrahman

Home Loan | 28 Jun, 2024

Start to end of my loan process was simple and guidance of your team members were to the point. My last communication was with Mr. MANOJ PATEL from surat branch he was very polite and helpful.

Anamika Vijaykumar Tiwari

Home Loan | 20 Jun, 2024

We extend our heartfelt gratitude to Mr. Pravin Sagare, Senior Officer of Customer Service, for his exceptional service. His remarkable demeanor and professionalism during telephonic interactions with customers have been truly outstanding. Over the past two years, we have utilized various services, yet none have matched the quality provided by Mr. Sagare. We are deeply impressed by the exemplary service, due to this reaons we has influenced our decision to obtain a second home loan from TATA Capital Housing Finance Limited.

Avinash Vasantbhai Bhesaniya

Home Loan | 07 Jun, 2024

I had applied for a home loan at Tata Capital & got the it approved quickly. The process was smooth and sanctioned with sufficient amount with tenure period of 20 yrs.

Sumeet Verma

Home Loan | 14 Mar, 2022

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Find the Right Loan for You

Affordable Housing Loan

At Tata Capital, we believe that every single person, regardless of their financial background, deserves a home to call their own.

With this vision, Tata Capital Housing Finance offers affordable home loans at competitive interest rates.

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Home Extension Loan

As the years go by and your family continues to grow, does your house feel smaller?

Tata Capital’s Home Extension Loan is a perfect solution to help you give your family that additional space they deserve.

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Home Loan for Self-Construction

Instead of buying a ready-to-move-in house, you can choose to purchase a piece of land and construct your house on it brick by brick.

A home loan for self-construction or simply a home construction loan is a special type of home loan given to help borrowers construct their own house on a piece of land or plot.

Know More

Home Loan Top-up

A home loan top-up is a facility offered by lenders under which a borrower can take an additional loan over and above their existing home loan.

The home loan top-up facility is available only for existing home loan borrowers without the need for any additional security or guarantee.

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Quick Cash

Quick Cash loan is a unique Pre-Approved personal finance top-up linked to your existing Tata Capital Housing Finance Limited (TCHFL) loans. This loan is only for existing TCHFL Home Loan and Home Equity customers.

Apart from its unique features, it also offers other advantages such as faster processing, and a paperless journey, notwithstanding that all this could be availed in just a few clicks at your convenience any day 24*7.

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Balance Transfer

A home loan balance transfer, or simply a home loan transfer, takes place when you transfer your outstanding home loan amount to a new lender from your existing lender.

With Tata Capital Home Loan Balance Transfer, you can transfer your outstanding home loan balance to affordable interest rates. Our home loan interest rates start from just 7.75% per annum*.

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