How to Avail of Tax Benefits on a Loan Against Property?

Loan Against Property Tax Benefits: Overview

A Loan Against Property (LAP), also known as a mortgage loan, is a type of secured loan where you pledge your residential or commercial property as collateral to avail funds. The amount you can borrow typically depends on the market value of the mortgaged property, among other parameters. Under specific circumstances, individuals can benefit from sizeable tax exemptions when availing of a Loan Against Property.

What are the Tax Benefits Available on a Loan Against Property?

Here are various Loans Against Property tax benefits that borrowers can claim under the old tax regime: 

• Tax Benefit under Section 37(1): If you use the loan amount to fund business-related expenses, you can enjoy tax exemption on the paid interest, the processing fees, and the documentation fees as business expenses while filing the claim under Section 37(1) of the Income Tax Act, 1961. 
• Tax Benefit under Section 24(b): Salaried taxpayers can benefit from Section 24(b) of the Income Tax Act, 1961 if the loan amount is used to purchase a new residential property. They can claim up to Rs.2 Lakh as tax rebates.

Additional Read: Loan Against Property to Start Your Business

When are Tax Exemptions Not Applicable?

When you are planning to use the loan amount to fulfil the following expenses, you will not be eligible for tax exemptions: 

1. Education
2. Marriage
3. Travelling
4. Renovating the mortgaged property itself

​​​​​​Why Should You Apply for a Loan Against Property?

If you are planning to opt for a mortgage loan for business or housing expenditures, opt for Bajaj Housing Finance, as we offer Loans Against Property with the following benefits: 

• ​​​You can borrow up to Rs.5 Crore* or even higher depending on the eligibility​​
• ​​​You can repay the loan over a long repayment tenure of up to 15 years
• We require minimal documentation to process your loan
• ​​​You can use the loan amount to meet business or housing-related requirements or for debt consolidation
• ​​​We offer attractive rates on Loans Against Property for both salaried and self-employed individuals
• ​​​You can get the loan amount credited to your bank within 72 hours*

*Terms and conditions apply. 

Additional Read: Step-by-Step Process to Apply for a Loan Against Property