They are but subject to certain conditions. Housing top-up loans can be claimed for tax deductions if they are used for the construction of a residential property or the renovation or repair of such property. You must submit valid bills of expenses. The deductions under these loans are limited to INR 30,000.
However, this will be under the overall deduction of INR 2 lakh provided under section 24. For instance, if you decide to undertake renovations at your home and the housing top-up loan's interest is INR 40,000; you can claim only INR 30,000 as a deduction for the top-up loan. In this scenario, the maximum deduction you will be able to avail of your home loan's interest portion under section 24 is INR 1.7 lakh.