Income Tax Deductions on Home Improvements, if any?

Hi,

One employee query.

Can house renovation be part of income tax deduction? if eligible, which would be the one?

Thanks.

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No House Renovation is not part of Income Tax Deduction

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Hi @MadhuP1

For self-occupied house , if you have taken a home loan for renovation , you can claim deductions on the interest component under section of Income Tax.

The interest that is payable on the home improvement loan is however tax deductible for up to Rs 30,000 p.a

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Is this 30000 PA part of 2 lac cap under interest on housing loan.

Regards,

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Hi @Shwetha

The combined and absolute limit for the tax deduction (for both) interest paid on the housing loans as well as the home improvement loan is Rs1,50,000.

For instance if the interest that you are paying per year on the home loan is Rs. 1,20,000 or less, the maximum benefit for of Rs. 30,00 on home improvement will be applicable!

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Thanks Dinesh.

Regards,

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How to Apply for Home Improvement Loan?

Here are the basic steps that you need to follow to apply for a home improvement loan:

  1. Make an estimate of the amount you require for the construction, repair or rework.
  2. Have the plan in writing and submit it to the bank.
  3. Generally a bank provides 85-90% of the amount that you have listed in your plan.
  4. The ā€˜technical departmentā€™ of the bank or the lending company approves the quoted amount, the lender evaluates how you can or whether you will actually be able to repay the loan amount, sanctions your loan and the amount is disbursed in your account.
  5. Sometimes the quotation may not be rejected but certain enlisted costs may not be included. To avoid such disappointments ensure that you read the brochure, terms and conditions of the home improvement loan carefully.
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