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Owning a house is every individuals dream; however, spending a huge amount of earning on this dream is difficult and risky. This is where home loans play a vital role. Earlier, people did not prefer taking a loan due to lack of understanding and information. However, over time, the Government and banks have simplified the process and reduced loan interest rates. This has encouraged people to buy property in residential and hospitality complexes without any issue.

Even though the loan application process is easy and quick, it is necessary to understand the basics of home loans. Several aspects are involved, and a clear understanding would help you choose the right offering since several banks provide various loan options.

A loan is a legal process; hence, it is important to have each detail on the paper rather than relying on the verbal commitment by officials. There are several clauses involved that you should be aware of. The most important of these is the interest rate offered. Since competition in the banking sector has increased, banks try to attract customers via lower interest rates. This is a gain for the home buyer as they must repay a lesser amount.

According to research, more people have applied for home loans in tier-2 and 3 cities during the pandemic and bought a property. This is a clear indication that individuals consider house buying as a priority. The Indian Government has introduced tax benefits for home buyers under different sections.

Below are the details of the same:

Section 24: Under this section, a person who buys residential property can avail of tax benefits on interest payable. This deduction is calculated on an accrual basis. The maximum benefit is Rs. 2 lakh and does not apply to the under-construction property.

Section 80C: This section defines the tax benefit on the principal loan amount. The maximum deduction is Rs. 1,50,000.

Section 80EE: The Government allows deduction of Rs.50,000 on loan interest. This section is only for first-time property buyers, and loan amount Rs.35 lakh maximum. This means that the value of property bought should be more than 50 lakh. The aim is to pass on benefits to low-income-class buyers who wish to own a house.


Below are some points that you should understand when buying property in the best residential complex in India:

The tax benefits are valid only for the borrower and property owner. No one else from the family, not owning the property, can avail of such benefits.

Every co-owner in joint property ownership is liable for the tax benefits. However, the co-owner should also be stated as a co-borrower in the loan papers.

In joint property, every borrower’s share needs to be mentioned clearly since the benefits will also be applicable in the same proportion.

One must present a certificate to claim tax benefits in the home loan. This certificate will state the interest and principal paid by the borrower in EMIs.

One major condition in loan tax benefit is associated with buying and selling apartments in India. If you sell your property within 5 years, the benefits will be reversed. The selling will be considered capital gains, and you will be liable to pay taxes.

Documents required for claiming the tax deduction

When you decide to apply for tax benefits, you must submit some documents as proof. These documents are mandatory and should be complete.

Documents stating your ownership.

Certificate of loan document with exact details of interest and principal paid.

Papers stating the purchase date or construction completion details.

Documents of municipal taxes paid by the borrower.

Thus, if you plan to buy your dream home in Rajkot, it is the right time. Compare, discuss and ask all relevant questions from the bank representative before going ahead with a home loan decision. Ensure you have all documents ready when you plan to claim the tax deduction. With initiatives like affordable housing, the Government is creating a process that favors buyers. The aim is to encourage first-time buyers.

Real estate has been growing fast, and in the future, property costs are expected to rise; therefore, if you are staying on rent, it is advisable to invest in home buying. This would give you peace of mind and let your family have an asset for the future.

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