Is There Tax Benefit On Property Loans?

Loans against property is taken by mortgaging any property including land for the purpose of acquiring a loan.

What this means is that you can avail a property loan by surrendering your property documents to the lender.In case you are not able to pay the bank or financial institution, they may proceed to acquire your property.

Many individuals do not know that there is no tax benefit to individuals on loans against property. When you avail a home loan you get a tax benefit of interest and the principal amount paid. However, there is no such benefit that is available in the case of property loans.

In fact, when you buy a property even the stamp duty and registration charges can be claimed as tax exemption under Sec 80C of the Income Tax Act.

No such benefits are available in the case of a property loan. But, individuals tend to take a property loan largely for an emergency. They do not prefer taking a home loan, but, sometimes they maybe forced into taking one for an emergency like health treatment, education of a child, marriage etc.

So, in case you are going for a property loan and have an option for choosing a home loan, go for the home loan as you can avail tax benefits on the same.

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