How and How Much Income Tax can be Availed on Loan Against Property?
When you're mortgaging your property in exchange for a loan, you are eligible to get certain income tax benefits. Read further to know about tax benefits on Loan Against Property.
Pledging your Residential or Commercial property is an age-old concept of availing a loan. When you cannot get a personal or credit card loan or any other specific loan to fund a particular purpose, Loan Against Property can be a good option.
You can easily apply for an alternative loan product if you have a rented, self-occupied or a land of your own. Nowadays, banks do offer loan against property where you have to mortgage your property and get a fair loan amount approved, depending on the property's current value. Rather than giving up the ownership of the property, putting it up as collateral with a reputable bank would be a wise option.
Loan Against Property is a secured loan that lenders approve based on the fact that they will have the possession of your property in case you fail to repay the loan amount.
Moreover, you also become eligible for tax benefits on Loan Against Property. Here are some of them:
Tax benefit under 24(B)
Salaried individuals can avail Loan Against Property income tax benefit under this section. If you're using the Loan Against Property amount to fund your new residential house, then you are eligible for tax deductions up to Rs 2 lakh. The tax deductions are applicable on the interest payments.
Tax Benefit under Section 37(1):
Tax deductions under Section 37(1) are applicable when the loan amount is used for business purposes. You can claim tax benefits on the interest charges, processing fees, as well as documentation fees that you would incur as a business expenditure.
No tax exemptions allowed in the following scenarios:
In case your loan amount is used for education, marriage, travel or medical bills, there is no tax exemption facility.
Under Section 80C, there are several clauses that allow you to claim tax benefits. Even when you have an ongoing home loan, you are eligible to get tax benefits; however, there are no tax benefits for Loan Against Property under Section 80C of the Income Tax Act.
If there is an urgent fund requirement, ICICI Bank Loan Against Property is ideal for borrowers, whether you own a Residential or Commercial property. You can avail the following benefits from the bank:
- Get loans of up to 60% of the property value for any business needs
- Special offers for doctors who can avail loans of up to 70% of the property value
- Zero prepayment charges for non-business borrowers
Balance transfer facility available at attractive interest rates
- Avail Loan Against Property to meet business or personal needs
- Affordable EMIs for a tenure of 15 years
- Get maximum loan up to Rs 5 crore
- Avail up to 90% of the total LAP as an overdraft
Any salaried or self-employed professional can apply for an ICICI Bank Loan Against Property. To apply for the loan, customers can visit the nearest ICICI Bank Branch, get in touch with representatives or give a missed call on the toll-free number – 9022499400 to get a call from an executive to take you through the application process.
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