CHEQUE BOOK

HT Estates - - HTESTATES - Harsh Roongta

I am work­ing in a multi­na­tional com­pany. As part of my CTC, the com­pany pro­vides a fa­cil­ity of par­tial in­ter­est pay­ment in case one avails a bank loan. I have a few queries: Do banks pro­vide a loan for pur­chas­ing plots? If yes, will it be of­fered as a hous­ing loan? Will I get in­come tax re­bate un­der the home loan cat­e­gory?

— Sarvechan Shah Lenders are more se­lec­tive when it comes to giv­ing loans for plots. But th­ese are avail­able for a lower ten­ure as com­pared to a home loan and are some­times more ex­pen­sive (upto 2% higher) than nor­mal home loans. Plot loans are avail­able only when the plot is pur­chased di­rectly from statu­tory au­thor­i­ties or from de­vel­op­ers who are pre-ap­proved by the con­cerned lender. Even the down pay­ment re­quire­ment is nor­mally higher at around 30% to 40% for such loans.

If you are plan­ning to con­struct a house on that plot of land, you can take a com­pos­ite loan from any bank to cover the cost of the plot as well as the con­struc­tion, but you will have to com­mence the con­struc­tion within a rea­son­able pe­riod which is be­tween one to two years from the date of pur­chase of the plot.

A com­pos­ite loan of­fers more benefits in terms of fi­nanc­ing as well as tax sops. The loan fi­nanc­ing in case of a com­pos­ite loan goes up to 80% to 90% of the prop­erty value as com­pared to the plot loan’s 60% to 65%. More­over, you can get tax benefits un­der sec­tion 80C for the prin­ci­ple re­pay­ment and sec­tion 24 for the in­ter­est paid on the com­pos­ite hous­ing loan, in­clud­ing the cost of the plot, only from the year in which con­struc­tion is com­pleted. Pure plot loans are not el­i­gi­ble for any tax benefits.

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