INCOME TAX18 Sept 2026
Should you use your bonus to repay your home loan or invest it?
A lump-sum bonus now forces a choice between clearing your home loan or investing it. It affects anyone with a home loan and spare cash. The math often favours investing: parking ₹1.59 crore at 12% could grow to about ₹8.73 crore, beating prepayment by ₹1.69 crore. But taxes, exit loads, prepayment penalties and lost liquidity change the picture. Weigh your risk comfort, then decide carefully.
Key Statutory Highlights
- A ₹2 crore home loan at 7.5% for 25 years carries a monthly EMI of roughly ₹1.48 lakh.
- Closing that loan after 10 years, when ₹1.59 crore is still outstanding, reduces the total loan cost to about ₹2.96 crore and saves ₹1.47 crore.
- Investing the ₹1.59 crore at an assumed 12% equity return could build about ₹8.73 crore in 15 years, against ₹7.03 crore if the freed-up EMI is instead invested each month.
Actionable Advice for Taxpayers / Founders:Before you move a large bonus, compare your loan rate with realistic after-tax investment returns, and check prepayment penalties, exit loads, capital gains tax and how much emergency cash you would lose. Do consider speaking to a tax professional before deciding.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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