I want to buy a land to build my house. This will cost me Rs.25 lacs & further I will have to take a loan of Rs.20 lacs. please suggest how much tax rebate I gain if I buy it on my name or buy it combined with my spouse? Also let me know how mu EMI & interest will be charged for this purchase?
RE:Hi, house loan on PLOT
by prasanna prabhakar chatufale on Jun 01, 2007 11:18 PM Permalink
Whether SBI giving loan for plot?I think ther is a rider that you have to construct a house within 2 years? I that right?
RE:Hi, house loan on PLOT
by NOEL GEORGE on Jun 01, 2007 08:40 PM Permalink
Yes,Aman you can apply for tax saving provided your load amount should not exceed Rs.15,00,000
RE:Hi, house loan on PLOT
by Mrityunjaykumar Gupta on Jun 01, 2007 08:29 PM Permalink
Yes, it will be considered for tax saving but you will get the benefit only after the construction of the house. You can claim the tax benefit for the previous period after construction in 5 annual intalments.
The article is nice but it gives only one side of the story. It says, It is good to go for the loan even if you can afford to buy a house/ shop from your own funds. Here the assumption is that everyone can have interest earnings on his own funds. But the assuption is not correct as the people following Islamic Sharia can not earn interest. Hence it will not be wise to pay Rs. 100 as interest to save Rs. 30 (or 33) as tax. A workable option (even though not the best) solution for such people (who follow Islamic laws abt interest) is to go for loans like Smart Home or Home saver etc. With these loans one can deposit the available funds in the account that the bank opens against the loan. That way they will save the interest. But the money will be available for them to use when/if required.
RE:Only one side of the story
by prasanna pai on Jun 02, 2007 04:42 PM Permalink
Mr.Fauwad, I do respect your religion and your sentiments. But please keep religion out of Finance. Had everything our religious books says , to be followed , life will become hell. For finance and economy let us consider human being as a one religion. Religion that believes in living happily with their earnings.
RE:Only one side of the story
by Vinu on Jun 01, 2007 07:20 PM Permalink
Islamic Law also suggest to offer to others and you shud keep money only for your basic needs. do u follow that!
RE:RE:Only one side of the story
by Sumeru dimbhale on Jun 01, 2007 10:15 PM Permalink
well said, some stupid morons bring islam in the middle of wholly unrelated things only when it suits them
Banks like HSBC and ICICI provide a way where the loan can be linked to a savings/current account and the principal is reduced by the amount in that account while calculating interest. For example, if your loan amount is 1.5 lakhs and you have 1 lakh in the SB account, then the interest you pay is only for 50,000.
Taking loan is not that beneficial as the article suggests. No bank gives loan at the cost of our deposits. It is always 2%, atleast, more than the deposit rate. So, we stand to loose the 2% or more right there. But the buyer gets some benefits of taking a loan (instead of investing hard cash) if he/she smartly invests some amount to beat the inflation and borrowing rate. This could be investing in additional land/plot purchase where the appreciation could be better than the loan borrowed, or invest in MFs/equities whose maturity can be utilized to short-close the loan and become the real owner of the house.
RE:Is taking loan a benefit?
by Amitabh Akolkar on Jun 02, 2007 01:34 PM Permalink
2%? u cannot afford that 2% interest when price of your house will increase by at least 10% a year?
RE:Is taking loan a benefit?
by MOHITE SAN on Jun 02, 2007 03:58 PM Permalink
My cousins name is also Amitab akolkar and he is in london are you the same.
RE:Is taking loan a benefit?
by Upadrasta PardhaSaradhi on Jun 01, 2007 06:33 PM Permalink
its all depends on personal choices. Seeing the way the House rents are increased , you will get a new your own house if you r ready to pay a bit more than what you pay for rented house.
for ex, in hyderabad , if we have to take a rented house nearer to the HitechCity, IT Hub, the house rents are about 11000 to 15000 per Month. If you can afford a bit more 2 to 3 % as EMI, you can take a good House may be a bit far, but you tend to pay arround 15000 - 20000 as EMI for one month, but still its your house and its your own house.
What happens if i buy a flat by taking a loan and then sell it off after 2 years. What happens to the tax rebate availed in the first and second year's interest.
RE:RE:Home loan interest
by Upadrasta PardhaSaradhi on Jun 01, 2007 06:22 PM Permalink
Officially you can not avail the tax rebate if you are planning to sell your property in the next 5 years. But technically, you will enjoy the rebate for the 1st and 2nd year even if yuo sell in the third year as nobody will check these things. :)
if you want to escape , you can always escape. :):)
RE:Home loan interest
by Amitabh on Jun 02, 2007 03:50 PM Permalink
No,Sir,they are right.There is a lock in period.You must won the house for 5 years if you want deduction under sec 80C for principal repayment.
RE:Home loan interest
by Upadrasta PardhaSaradhi on Jun 01, 2007 07:12 PM Permalink
see your Home Loan Interest Certficate and it says the rebate is only applicable if you dont sell the property in the next 5 years. :)
What if I take a home loan of more than Rs 15 lakh and also make my spouse as co -applicant, (suppose if it is 20 lakhs), then the annual interest would be 2 lakhs and hence can both my spouse and myself claim benefit by dividing the total interest (and also principal) between us ? There is nothing in this regard in the article.
RE:Home loan !!
by Vipin Durga on Jun 02, 2007 01:14 AM Permalink
Not only on the loan agreeement, but also both of you should be the joint owners in the said property. Tax benefit can be enjoyed by only the person in whose name is the property.
Like earlier article this is also a junk one ... why does rediff allows such article to be published ??? Always the headline is attractive enough but content is rubbish. Such information are known to schoon kids now a day
RE:junk
by Upadrasta PardhaSaradhi on Jun 01, 2007 06:18 PM Permalink
if you know, keep quite. Such information ned to be published repeatedly for those who dont know and also to those who knows and forgotten.
RE:junk
by on Jun 01, 2007 10:00 PM Permalink
Prakash, Thats not entirely true, How can you sure that everyone is aware of Tax in India, like me recently relocated to India and I dont have proper idea on income tax and other benefits by home loans so this article does give a foundation.
You may a expert of housing loans, but the reality is every day thousands of people are takin g decision to buy a house. Therefore we should accept such informative articles with open mind. If you know some more information on this subject please share it in forum.
RE:my own flat
by Vishal Dattani on Jun 01, 2007 10:28 PM Permalink
If the flat is in parents name (preferably in ur mom's name) then u can show as rent paid to ur mom / dad. but it would be considered as income for ur mom / dad. so if they come under the tax slab, then they would have to pay tax on the taxable income.
RE:my own flat
by SAMAPT CHAPLOT on Jun 01, 2007 05:44 PM Permalink
In case of Self Occupied house at the place of working that is you occupy your own house at the place of working and do not pay the rent for it to any body else, you cannot get the benefit u/s 10(13A) for HRA . In case ur house is situated at any other town under ur possession and u occupy at the place of service another rented house u can get the benefit of HRA
RE:my own flat
by tanveerali Miranji on Jun 01, 2007 05:43 PM Permalink
It is the precondition to avail HRA exemption benefit under Sec 10 of the Income Tax Act, the assessee should not owned a House. In your case if the house is in your name than you can't get the benefit of HRA exemption.
RE:my own flat
by Arvind Balakrishnan on Jun 01, 2007 06:17 PM Permalink
That's not true. You can still claim HRA while enjoying tax rebate on Home loan Interest and Principal repayments. You will have to declare you haven't let out your house on rent, if that house is in your name.
RE:my own flat
by Upadrasta PardhaSaradhi on Jun 01, 2007 06:20 PM Permalink
there is a trick here, you can say my house is far from my house and say I have given it for rent and can claim both HRA and Tax benefits by profucing the House rent receipts of some house.
But you have to show the rent you gets for your own house as a income from other Sources.
LAw has some flaws and you need to be smart ot use them. :)
RE:my own flat
by Upadrasta PardhaSaradhi on Jun 01, 2007 06:21 PM Permalink
there is a trick here, you can say my house is far from my office and say I have given it for rent and I am residing in a rented House.
Now you can claim both HRA and Tax benefits by producing the House rent receipts of your rented house and loan interest certficate of your own House. But you have to show the rent you gets for your own house as a income from other Sources.
LAW allows somethings and you need to be smart ot use them. :)
RE:my own flat
by Amitabh on Jun 02, 2007 03:53 PM Permalink
If your own flat is self occupied,you can claim HRA is you are actually receiving it from your emplyer and paying rent.However,if your self occupied house is in same city where you are residing,there may be problem for you to prove that there is a business or emplyment constraint for your not living in your own house.In that case,the self occupied house might be treated as deemed to be on rent and you may have to pay tax on fair rent.Otherwise there is no problem.Under Sec 10(13A),read with rule 2B there is nothing against your claiming HRA exemption provided you satisfy the conditions stated therein.
RE:my own flat
by Amitabh on Jun 02, 2007 04:05 PM Permalink
If you are yourself living in your self occupied house and not paying any rent,entire HRA will be taxable.
RE:my own flat
by mohammad anwar on Jun 01, 2007 10:31 PM Permalink
You can claim HRA benifit provided you produce a bill from any of your relatives. Or if your parents own a house you can request them to issue a rent receipt provided it may not attract any extra tax liability
