Invest Wisely: Land Purchase Loans and Tax Benefits

The Land Purchase Loan, also known as the piece Purchase Loan, is a special type of loan from Hero Housing Finance that can help you buy a piece of land to build a house on. There are some good things about buying a ready-made home, but making your home fit your needs can be much more rewarding.

With these land loans, it will be easy for you to buy the plot of land you want. With a home loan, you buy a house that is already set up and ready to go. This is not the same thing. A loan for land purchase, on the other hand, works well for all purposes. There are also tax perks to this loan. The Income Tax Act says that you can subtract up to Rs. 50,000 from the principal amount and up to Rs. 2 lakh from the interest amount each year. This loan to buy land can be the best choice for you in two situations, which are shown below.

• If your planning to purchase a resale plot?

• If you want to buy land through direct allocation.

The provision also offers the advantage of a top-up loan, giving you access to extra money whenever it’s needed. If you want to borrow, you should use an EMI calculator to determine your monthly outgoings.

Obtaining the Income Tax Deduction for Plot Loans.

The Income Tax Act of 1961 provides a number of tax breaks for land acquisitions. The most important parts of the tax breaks for plot loans are listed here.

1. Section 80C

The principal amount of your plot loan EMI (Equated Monthly Installment) qualifies for a tax deduction under Section 80C. Both the principal of an existing debt and the principal of a new plot loan count toward this total. A total of Rs 1.5 lakh may be deducted in any one fiscal year.

Stamp duty and registration fees for a plot purchase can be deducted from your taxes just like the principle you paid back, under Section 80C. While these costs can be deducted within the Rs 1.5 lakh cap, they are only deductible in the year of purchase.

2. Other key clauses related to Section 80C

• If the property and the loan are held jointly, all of the owners can split the tax benefits equally.

• In order to qualify for the deduction, you must hold on to the property for at least five years after taking title.

• Investments in a variety of tax-advantaged accounts can be written off in one fell swoop according to Section 80C. These accounts include Provident Funds (PF), Public Provident Funds (PPF), National Savings Certificates (NSC), and tax-free fixed deposits. These expenditures, along with the plot loan’s principle installment, can all be covered by the Rs. 1.5 lakh cap.

3. Section 24

Loan interest for the acquisition, building, or improvement of real property held for self-occupation or rental purposes is deductible under Section 24 of the Income Tax Act.

Other key clauses related to Section 24

• The biggest discount you can get for homes you live in yourself is Rs 2 lakhs per year. There is no maximum price for homes that are rented out or thought to be rented out.

• For the interest paid credit to be available, the property must be completed either purchased or built.

Benefits of Getting Loan from Hero Housing Finance 

• You can get a significant sanction from us when you use our loan for land purchase to cover your costs.

• Comfortably pay back the land loan over a tenor of up to 30 years.

• We offer competitive LAP interest rates for various consumer segments.

• If you meet the conditions, the loan approval process will be quick and uncomplicated, and the turnaround time will be short.

• When the sanction is finalized, the whole amount will be deposited into the account of your choice immediately.

• Apply for a top-up loan of up to Rs. 1 crore from Hero Housing to cover any unforeseen costs that may arise from refinancing your existing land purchase loan.

• You can keep tabs on your loan information and make payments with the Hero Housing Finance website.

Eligibility criteria for loan for land purchase

Our loan for land purchase is easy to get because the requirements are simple and you only need to show a small amount of paperwork. If you want to make things even easier and know for sure how much you can get, use the qualifying calculator.

Land Acquisition Financing Costs and Fees

Hero Housing Finance company offers some of the most affordable rates, fees, and charges for land acquisition loans in the industry. Make an informed decision by researching alternative loan providers.

Key Things to Know About Plot Loans

• Property criteria: This loan can be used to buy a land as little as 150 square feet in size.

• Maximum funding: Depending on your credit history and the expected growth in property value, the maximum loan amount you could receive through this program is Rs 3 crore.

• Age limit: If you are between the ages of 21 and 75, your application will be considered. Applicants without income but who are 18 or older and have a co-borrower can apply.

• Documents: ID and residence proof, such as a passport, Aadhar Card, voter ID card, and driver’s license, are necessary for loan approval. Bank account statements, GST reports, wage stubs, or ITR would suffice as income documentation.

Conclusion

 

In conclusion, a loan for land purchase, is the crucial financial tool that you should know about. It can help you in buying a piece of land for different purpose like building a home on it or for investment purpose. The land purchase loan also provide several tax benefits that can be utilised to for a piece of land at minimal pricing. The Income Tax Act provides deductions under Sections 80C and 24, making it financially advantageous.

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