Deduction towards Loan taken for Home Loan Insurance

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A homeowner has taken a separate loan to cover their home loan insurance. They are seeking clarification on whether they can claim tax deductions on the principal and interest repayments for this specific insurance loan, in addition to their main home loan. The advice given suggests this is generally not possible unless the insurance loan was structured as a top-up on the original home loan.

Alex Fernandes

Alex Fernandes (Querist)
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02 October 2021 I have taken a loan for funding home loan insurance. Can I claim deduction on Principle and Interest re-payment of this loan.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 October 2021 As such no; unless it is top up home loan.

Alex Fernandes

Alex Fernandes (Querist)
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02 October 2021 Sir,
I request further clarification.
I had taken home loan (from HDFC Bank) for buying one flat. In addition to this further loan was taken (from HDFC Bank) for home loan insurance of this same flat.
I know I can claim deduction on Principle and Interest re-payment of home Loan.
But can I claim deduction on Principle and Interest re-payment of loan taken for home loan insurance?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 October 2021 Whether the second loan taken was personal loan or top up loan?

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