"What tax benefits? Your principal, up to 1 lakh a year, is tax-free under section 80C; but then your daughter's school fees and the provident fund paid from salary qualify under the same 1 lakh limit, so you don't get anything extra on your home loan. The interest paid on your home loan is tax free upto 1.5 lakhs a year – you pay substantially more than that – but you either pay the bank or the government, and the government takes only 30%, so what tax did you really save?"
"Well, compared to renting…"
"The house you stay in rents at Rs 12,000 a month, less than the interest per month for a long time. And you get a tax benefit for renting too."
Sharma said, "Understood. Ok, the past is past. I can feel bad, but it is a sunk cost. What you're saying is – as you save money, make part-payments up your home loan. And shift to a different bank if the cost and benefits work out.
IDFC Project Equity, a leading infrastructure equity investment manager, has elevated Aditya Aggarwal to the post of managing director incharge of investments. Aggarwal was previously a senior member in the energy team at IDFC.