Loan to buy a plot

Q: I am planning to take loan from a bank to buy a plot. I m buying this plot to construct a house, will I be able to show my loan amount and the construction amount for the tax benefits?

Karan Manjrekar, Bhiwadi

24th April 2013

Home Loan in Bhiwadi

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buying plot

loan to buy a plot

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No. You will not get any tax breaks if you take a loan to buy a plot. But, if you take a loan for construction, that means a loan to build a house on that plot of land, then you can get a tax break. In this case, the tax benefits are available on both portions of the loan the one to purchase the plot and the one taken to construct the house thereon. If u take a loan of 10 lakh for plot and 5 lakh for construction, then you can get tax benefit for the entire 15 lakh. But too many processes are involved in this case.

Kaushik Bardia,

18th June 2013

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Hi Karan, usually the banks dont give loan for buying land alone, request for a loan that includes funds for construction also. At first they will give only land amount and then ask banks to hold the construction amount disbursement. Pay regular EMIs and try to clear the loan within given time, so that u can take next loan for construction.

Vatsa Suman, Pune

18th June 2013

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Yes definitely.. firstly you should have clear documents related to the property. Only then the bank will verify everything and give you loan. And if you got loan approved, then you can claim it for tax benefits.

Suhail, Delhi-NCR

18th June 2013

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