Home Renovation and it’s Tax Benefits

Online Commercials or TV ads of glamorous homes, often leave us with the dream of owning and beautifying our sweet homes in a similar fashion.

And to either repair or remodel a house doesn’t come cheap. It will require a significant amount of money, which might affect our monthly budget in a way which will be unmanageable for us. The renovation cost can shoot up to lakhs at times and not always one has enough funds to go ahead with the plan.

Do not let the insufficiency of funds dampen your aspirations to build your nest in the most delightful manner. Personal loans have emerged as a great resource to cater to your additional requirement of funds, without letting you touch upon on your savings. It is convenient to apply and can be repaid over a period of time, and is disbursed in a short span of time.

Let us look at the key benefits of applying for a personal loan online, to meet the temporary financial shortage.

  1. Easy documentation– Compared to other loans, the documents required for personal loans are minimal. If you are the pre-approved customer of the bank, you may not even require to submit the documents. Based on the eligibility and the required money borrowed, the loan amount is disbursed to the account.
  1. Multipurpose loan – Personal loan is also popularly known as a multipurpose loan, as the funds availed from a personal loan can be utilized for several purposes. It is not limited to any specific use and resolves the temporary shortage of funds. 
  1. Easy repayment options– The repayment tenures offered by lenders are mostly flexible and allows you to optimize the monthly outgo of installments, as per your convenience. Usually, the repayment period starts from 12 months and can be extended up to 60 months.
  1. Easy application– Applying a personal loan is now possible just at the click of the button. You can visit the website of the lender and fill the details of the form, and upload the necessary documents. You can also visit the bank branch and apply for the same. 
  1. Quick disbursals– If all the documents are in place and if you are eligible for the loan, the lender will approve the loan application within a short. If you are a pre-approved customer of the bank, the bank will approve the loan application instantly and the amount gets credited to the account.
  1. No collaterals against the loan – Personal loan is an unsecured loan and does not require any collateral to be put up as security. You will not have to pledge any asset to avail of the loan amount, which is normally the case with other loans.

The bliss of having to stay at your own dream home is unparallel. A home is a place where we unwind and spend the most memorable of times, with our loved ones. It is every person’s aspiration to transform their home, to be the best place on earth to come back to. But to achieve that in reality itself is a daunting task involving higher costs and greater hassles. You might already be burdened with other loan debts and are not left with enough savings to go ahead with this extra expenditure.

You may ask availing a loan for home renovation, might shoot up monthly budgets adding up to extra costs. But, there is a flip side to it, that personal loan for the home renovation can help you save on tax. This is what you need to know about tax benefits on the home renovation:

Under section 24 of the Income Tax Act, 1961, you can claim a tax deduction on the interest component made for a home renovation loan for a year. For the self-occupied property, the capping is decided at Rs 30,000 a year. In case your property is rented, then full interest shall be allowed as deduction.

However, to avail such benefits, keep the invoices and bills incurred towards this renovation cost as proof for claiming tax benefit. For self- occupied houses, if there are major repairs, those costs are considered to be “cost of improvement” for that particular property. This, in turn, will bring down the taxable capital gains if the property is ever sold in the future.

The cost of renovation is lessened from taxable capital gains, which means it will help reduce tax liability when the original renovation cost is adjusted for the price of inflation.

If this interests you in any way, you can choose Kotak Mahindra Bank Personal Loan as your Personal Loan partner to beautify your home.

With so many benefits at its disposal, personal loans are hence an ideal choice for many consumers.

Kotak Mahindra Bank’s personal loan interest rates start at 10.50% p.a. It does not let you compromise on the important things of your life. Kotak Mahindra Bank personal loan can be availed for managing the finances, in turning your new house into a dream home.

Below is the eligibility criteria to apply for a personal loan at Kotak Mahindra Bank: 

Eligibility criteria for Salaried Employees:

  • An applicant should be a minimum of 21 years of age.
  • The maximum age of the person should be 60 years at the time of loan maturity.
  • An applicant should have a minimum income of Rs. 25,000 and above.
  • He/She should have completed a minimum of 2 years in employment and a minimum of 1 year in the current organization.
  • Should have completed a minimum of 1 year at stay in the current residence.

Eligibility for Self Employed Individuals:

  • He/She should be a minimum of 25 years of age at the time of application.
  • At the time of loan maturity, the applicant should be 65 years of age.
  • Post paying the tax, the annual minimum net income should be more than 4.8 lakhs.
  • Should have a minimum of 5 years of experience, post-qualification experience.

Let us have a look, how you can apply for the personal loan online for home improvement :

  1. Fill the application form – You will have to visit the lender’s website and click on the apply now button. All you need to do is fill the application form and enter the necessary details.
  1. You can select the loan amount and proceed with the further process. Apply only for the loan amount which you are in need of, and not according to your eligibility. It will ease your pain of repaying the higher debt amount.
  1. Upload the necessary documents – Post filling the application form, you will have to upload the necessary documents, which are very minimal. It includes your KYC documents, address proof, and income proof.
  1. Post the submission of the documents, the lender will evaluate the eligibility of your loan application and if you qualify for the same, the loan amount will be disbursed to your account.

You can also apply for the loan offline by visiting your nearest branch. In that case, you will have to furnish the hard copies of the required documents. Once the loan amount is disbursed to your account, you can utilize the funds for the beautification of your dream home.