Home loan verses fixed deposit

Tax planning 282 views 2 replies

I am planning to buy a second home and I am in a 30% income tax bracket. I requires Rs. 15 L & I have 20 L in bank as FD. The  Bank is ready to give home loan of 15 L against my  FD   as collateral.  Consider tenure of home loan as 10 years.

So which option will be benefacial considering  tax planning and earning  and why ?. 1. either to premature  the FD to make  payment  Or  2. Go for Home loan as bank advised?

Please Guide.

Replies (2)

First option is profitable. 

Roughly speaking, the capital lost for saving 30.9% is net 69% loss.

I think loaning is not a god idea if you have money


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