Loans
Eligibility
Broadly speaking, home loans can be availed whether you want to buy or build
a house. Salaried Employees and Self-Employed Indian residents over 21 years
of age at the beginning of the loan and below 65 at its maturity can avail
Home Loans.
Loan sanction
The loan sanction amount depends on your repayment capacity - based on your
total current income and your future repayment capacity. Your spouse's gross
income can be added to enhance the loan amount eligibility. The maximum loan
that can be sanctioned varies with each bank/institution and generally
ranges from Rs.10 lakhs to Rs.1 crore.
Repayment
Usually loan tenures range from 5 years to 20 years and does not extend
beyond the age of retirement or when you turn 65 years of age - whichever
comes first. The EMI - Equated Monthly Installment is the amount of money
you repay every month until the end of the loan tenure - which comprises
both principal component and an interest component.
Tax Benefits
The Income Tax Act 1961, allows tax concessions on both the principal and
interest components of the loan. The upper limit of the amount of deduction
of interest payment deductible from your gross total income is now
Rs.1,50,000 per annum. In addition, sec. 88 offers tax benefits for
principal repayments up to Rs.20,000.
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