My father owned land that was recently acquired by the government. We will be paid by the government in lieu of the land acquired by them under the land acquisition Act? Do we need to pay tax on that or declare the amount as part of his income tax return? — Samir Pathak
Compulsory acquisition by the government is considered as a transfer and you will need to pay capital gains tax on the basis of the amount paid by the government. But if the asset is agricultural land located at least 8 km away from an urban centre, it is not counted as a capital asset and no capital gains tax is payable on it.
I plan to buy an apartment in Mumbai for ` 1.8 crore. The total cost of the unit including stamp duty, VAT, brokerage, club mem- bership, development charges is
` 2.35 crore to ` 2.4 crore. I want to know if the bank will give a loan for the total amount and not just the cost of the flat. I had bought a 1BHK earlier on a 15-year home loan and foreclosed it in 10 years.
— Swaroop Nath
Assuming you have sufficient income to justify the amount of loan, you will be eligible for 75% of the agreed value of the property (ie 75% of
` 1.80 crore which is ` 1.35 crore). It is possible that some banks may include the club membership (if it is transferable to a new buyer) and development charges in the cost and hence you could be eligible for a larger loan. Since you are likely to have a good credit score (as you have prepaid an earlier loan) and sufficient income to justify a larger loan, you can consult a housing finance expert to find an innovative solution to get you better loan eligibility. This could be a loan against another property or even an unsecured loan from the same lender.
My friend applied for a home loan of ` 50 lakh to purchase a newly built-up flat with a housing finance company in Howrah, West Bengal. All the processes are almost complete and he has received loan approval through an SMS. The lender has asked him to find a guarantor on his behalf. Is it mandatory? Is there any statutory guideline/rule from the RBI or any concerned authority on the same?
— Dipesh Goel
Life insurance is not mandatory as per guidelines from National Housing Board. However, it is in your own interest to take a term insurance to ensure that your family inherits the property and not the home loan in the event of your death during the loan term. You can buy a single premium term insurance policy from any insurer (not necessarily LIC) for the loan tenure. However, if you buy it from LIC it is possible that LIC housing finance may lend you the money for the one time premium and recover it in easy EMIs with the home loan.
So though the term insurance policy from LIC may be expensive it may be more convenient and easy to pay for. Just make sure that you buy a term insurance policy and not an investment cum insurance policy.