Housing loan is the finance taken for buying/modifying
a real estate property. Home Loans, Home extension loans, home improvement
loans, NRI loans and home equity loans fall under the category of housing
loans.
Any Resident or Non-resident individual who is planning to buy
a house in India can apply for a Home loan. If you have decided to
buy a property in the near future you can even apply for a loan before
you select your property. Once you decide the maximum amount that you
can put into the property, all Housing Finance
Institutions let you know how much you are eligible for and this helps
you plan out your budget.
Every Home Loan customer is eligible for tax benefits
under sections 88 and 24 of the Income Tax Act. Allowable deduction of
interest paid during the year: As per the budget of financial year 2001
- 02, every customer can claim a deduction on interest amount of a maximum
of Rs. 150000/- or the actual interest paid (whichever is lower) to the
HFI from his Gross Taxable Income. Tax exemption on Principal repaid during
the year: The budget for financial year 2001 - 02 provides for tax exemption
on a maximum of 20% of a principal amount of Rs. 20000/- or the actual
interest paid during the year (whichever is lower) to the HFI from the
total tax payable by the customer.
The Mortgage Financing industry was estimated approximately at US $ 18 billion in India. The mortgage industry is undergoing a change as the market is dominated by banks in the direct housing finance sector. Though the housing finance industry in India is growing for the past few years still financing through the organized sector continues to account only for 25% of the total housing investment in India
