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I live in an apartment owned by my mother.

I plan to take a home improvement loan from the bank to renovate the house.

Since the house is on my mother's name, the bank has asked us to make a joint application with my mother as the primary applicant.

Can I claim any tax exemption on this home renovation loan as I will be repaying it?

- Nagesh Ramdas
 

No. You will not be able to claim any tax benefits.

Tax benefits on interest payment

Only owners of the home (or co-owners) are eligible for any tax benefits in respect of interest payable on a loan taken to renovate a house property.

Since you are neither an owner nor a co-owner, you will not be eligible for any tax benefits. Despite the face that you may be a borrower or co-borrower and are actually repaying the entire loan.

Tax benefits on principal repayment

In the case of principal repayment taken on a loan for renovation of a house property, it is not eligible for any tax benefit. A home improvement loan is distinct from a loan taken to acquire/construct a house property.

• Do I get tax benefits on a top-up loan

Though I reside in Mumbai, I took a loan to build a home in Kerala [Images].

However, the bank based in Kerala, from where I have taken the loan, is charging me a high rate of interest. It amounts to approximately 10% per annum for 15 years. This is fixed rate loan.

Can I approach another bank to take over this loan at a much lower rate?

If not, what are the other options to reduce my interest rate?

- Biju Nair
 

You can definitely approach another bank to takeover the loan. But, to do so you must have an excellent track record of timely payment on the loan with your existing bank.

Your new bank will need to be active in Kerela as well as Mumbai for better co-ordination.

• How to get tax benefits on your home loan

I want to purchase plot of land and build a home.

The land that I have selected is located in a rural area based outside the city. In fact, it would probably come under the agricultural land category.

Will I get home loan for this?

I am assuming you have taken a term policy and hence your annual premium is less than 20% of the sum assured on the policy.

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