I am buying a residential land in sector 9 in Gurgaon. I want to take home loan from a bank. Though I am not sure if I would get income tax benefit on this or not. I am getting different information from different people. Sombody is saying that if I take Land + Construction loan then I would get IT rebate. But I am not clear if I would get rebate on complete loan or only loan component which is given for construction.
You will not get any tax benefit for the money borrowed for buying residential land.
But as rightly pointed out by `somebody`, if you take loan for building a residential property, then, you qualify for tax benefits.
There is a condition as to completion of construction within a specified period.
You can act smart and combine the loan for both purposes and enjoy the tax benefits for land too.
Dear Brajesh, Plz. note in order to avail Income Tax benefit on home loan, the construction should completed within 3 years from the date of disbursal of home loan.
Now considering ur case, following options r there for u.
1. Land purchase thru Loan & construction from own money - In this case, although the loan was taken primarily to purchase land still u can avail the tax benefit on this loan if u have constructed ur house on this land within the 3Y period.
2. Lan purchase as well as construction both r from loan - In this case again u can avail tax benefit on total loan condition the construction is completed within 3Y.
Plz. note as the construction `ll take time to complete, the interest paid by u in between on land loan or land + construction loan `ll not be available for tax benefit in the same FY. But u can carry over the same & avail @ 20% each year from the FY of completion of construction.
| NIFTY 
