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I took a home loan in 2002 and, last month, I took a top-up loan with the same bank.
The purpose was for construction of my house and the tax benefit.
Now, I am told by the bank that they will not be giving me any income tax statement on the top-up loan.
Is it true?
- Chak
Tax benefits are available in respect of interest payable on a loan taken to acquire/ construct/ repair/ renew/ reconstruct a house property.
Unless the top up loan is used for any of the above purposes, no deduction is available in respect of the interest payable on such a loan.
It is not very clear from your query as to the exact use of the top-up loan. Also, you have not stated whether the house is self-occupied or rented out.
For the purpose of this answer, I shall assume the house is occupied by you and that the top-up loan is used for construction of an additional floor in your house.
Based on these assumptions, the position of tax benefits will be as follows:
1) With respect to interest payable on both the loans together, it will be deductible up to the maximum limit of Rs 1,50,000.
2) The amount of loan principal repaid on both the loans together will also be deductible under Section 80C to the maximum extent mentioned in that section.
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