When you are considering purchasing a property and receiving a home loan, it is critical to understand is GST applicable on home loan EMI. In India, the value of a home loan is exempt from GST. It does, however, apply to the processing fees and other costs that the bank or other financial organisation imposes to pay out the house loan.
Applicability of GST on Home Loan EMI
The EMI comprises two parts, principal repayment and interest payment. Since interest is a financial service, not a supply of goods or services, GST is not levied on your EMI’s interest component or principal repayment.
When you take a home loan, the lender charges a onetime processing fee. This amount is subject to 18% GST. For instance, if your processing fee is Rs 10,000, you will pay Rs 1,800 as GST, making the total cost Rs 11,800.
Any administrative or technical fees (e.g., legal report, valuation charges, etc.) are also taxable at 18% GST.
If these charges are levied by the lender (especially for fixed-rate loans), GST at 18% applies to such fees.
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Is GST Applicable on Home Loan EMI?
pragati
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7 months
2025-05-13T16:10:28+00:00 2025-05-22T16:17:37+00:00Comment
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