2 CHEQUE BOOK
Your queries answered
I have taken a home loan with my wife as the main applicant and I am the co-applicant. I have registered the apartment under my name. The bank has released 80% of the loan amount to the builder. I came to know that since the property is not registered under her name, she cannot claim tax benefits. What should I do to make her the co-owner with 50% share in the flat? Do I need to go for re-registration? Registration had cost me ` 1.5 lakh. I have read about transfer deeds, gift deeds, will deeds etc. Will gifting 50% property to my wife solve the problem or do I need to sell 50% of the property to her? - Sagar Mehta
You will need your lender’s approval if you wish to gift 50% of the property to your wife, or re-register the property in her name to enable her to avail tax deduction benefits. The approval should not pose a problem, as she is a co-applicant to the home loan.
Whether you gift or sell a part of the property, it will have stamp duty implications though the stamp duty on a gift will be lower. In any case, if you gift the property it will not serve any benefit under the IT Act as the income from the asset gifted to the spouse will be clubbed with your income.
I want a loan to buy land for my house. The land has still not been converted to residential use and is actually agricultural land. It is located within 5 km from the city.
– Samiul Islam No lender will be able to provide you a loan to purchase an agricultural plot even though you eventually want to use it to construct a house. If you still want to buy the plot, you can consider taking an unsecured personal loan which will be fairly expensive. It is available at an interest rate of 13% to 22% per annum depending on the kind of employer you work for and your credit profile. Also unsecured loans are available for much shorter period such as five years and hence your EMI burden will be quite high. Another option could be to take a loan against tangible moveable security such as shares, mutual fund units, surrender value of your life insurance policy, national savings certificates, etc. These are much cheaper and are available at an interest rate of 11% to 12% per annum.
What are the tax implications if a person buys a house with a loan and sells it within three years and if he decides to sell it after three years? Further, what is the impact on benefits related to interest and capital repayment? – Saloni Gupta
If you sell a house within a period of three years from the date of taking possession, the difference between the cost price and the net price shall be treated as short-term capital gains and will be included in your other income and taxed accordingly.
But, if the sale takes place after three years, the profit will be treated as long term capital gains and will be taxed at 20% after indexation.
You can also save taxes on such long term capital gains by investing the capital gains in another house property or bonds.
In case you sell the house bought against a loan within a period of five years from the end of the financial year in which possession of the property was taken and you had claimed the tax benefits under section 80 C in respect of principal portion of loan, all the deductions allowed in respect of the principal portion of such loan will be treated as income of the year in which this house is sold.