How to Avail Loan Against Property Tax Benefits?

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5 Min 13 Jun 2024

Highlights

Overview of Loan Against Property Tax Benefits
Tax Benefits on a Loan Against Property
Reasons to Apply for 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 property (residential or commercial) as a collateral to avail funds. The amount you can borrow typically depends on the market value of the property you offer as a collateral, 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 on a Loan Against Property?

The below-mentioned points will tell you how to claim the various Loans Against Property tax benefits and what doesn’t fall under the purview of a tax exemption:

Tax Benefit under Section 37 (1): If the loan amount you received from your lender is used to fulfil business-related expenses, then you can enjoy tax exemption. Borrowers can claim rebates on the loan interest they pay, the processing fees, and the documentation fees as business expenses while filing the claim under Section 37(1) of the Income Tax Act.
Tax Benefit under Section 24(b): Salary earners can take advantage of Section 24(b) of the Income Tax Act of 1961 if the loan amount disbursed is used to buy a new residential property. Salary earners are allowed a claim up to Rs.2 Lakh as a tax rebate.
Borrowers will not be eligible to file for tax benefits on a Loan Against Property if the loan amount is used to renovate the mortgaged building.

Additional Read: Loan Against Property to Start Your Business

When are tax exemptions not applicable?

When you are planning to use the loan amount for fulfilling the following expenses, you may not be eligible for tax exemptions.

Education
Marriage
Traveling
Renovating the mortgaged property itself

Section 80C of the Income Tax Act allows you to claim tax benefits. Even if you have an active house loan, you can still qualify for additional tax benefits. But there are no special tax benefits for Loans Against Property available under Section 80C.

Why You Should 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 Loan Against Property with the following benefits:

You can borrow up to Rs.5 Crore* or even higher depending on the eligibility.
Repay your loan with a convenient loan tenor of up to 17 years.
Our Loan Against Property eligibility criteria are easy to meet and designed for easy approval.
We require minimal documentation to process your loan.
Use the loan amount for business or housing-related requirements, or for debt consolidation.
We offer attractive rates on Loan Against Properties for both salaried and self-employed individuals.
Get your 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

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