GST has made real estate dealings a lot more transparent compared to the cascading taxes levied earlier. However, GST on home loan has made the offering slightly more expensive for prospective homebuyers. That being said, the central government adopted some initiatives to aid house purchases amid the pandemic to boost the real estate sector and those who aspire to become homeowners. For example, the government has reduced the GST on housing loan to offer relief.
To know more about GST on home loan processing fee, current GST rate on home loan, GST on home loan interest or how to calculate GST on home loan, read the points below.
The most important fact to note is that home loan GST is not applicable on properties that are ready to be occupied. On the other hand, a 12% tax is levied on under construction residential projects. This is also applicable to those that haven’t received the Occupancy Certificate (OC) yet. The current GST rate on home loan is 18% across India, and it replaced the 15% service tax that was previously applicable. You are required to pay GST on home loan processing fee, which is usually around 0.25 to 1% of sanctioned home loan amount.
Since the implementation of GST, many have raised concerns about its implications. One such question is related to the effect of the new taxation system on homebuyers. Following are some of the effects of GST on home loan EMI.
Since April 2019, the Government of India has significantly lowered the home loan GST rate in order to assist borrowers in obtaining home loans. To know how much GST on home loan, the best way is to calculate 18% of the total processing fee charged to you. If the loan is taken for a home under construction, then you need to calculate 12% of the fee charged.
Now that you understand the implications of GST on home loan, choose the right lender to maximise your savings. To truly benefit from a cost-effective and comfortable experience, avail the Bajaj Housing Finance Home Loan. This offering is affordable, has nominal fees and charges and allows you to enjoy a competitive and attractive home loan interest rate. To start your journey as a borrower right away, apply online by sharing basic personal information.
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Last update on 11-Mar-2021
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