CHEQUE BOOK

HT Estates - - HTESTATES - Harsh Roongta

Is in­ter­est on home loan taken from friends and rel­a­tives el­i­gi­ble for in­come tax ex­emp­tion under section 24?

— Pi­naki Ghosh You can take a home loan from your friends or rel­a­tives and claim tax de­duc­tion ben­e­fits under section 24 (b) for in­ter­est paid on the loan. How­ever, the claim of in­ter­est shall be re­stricted to ` 1,50,000 per an­num if the house is used for own res­i­dence, but in case the prop­erty is let out, you can claim full in­ter­est. No de­duc­tion is avail­able for prin­ci­pal pay­ment under Section 80 C in re­spect of loans taken from friends and rel­a­tives. Tax ben­e­fits under Section 80 C shall only be avail­able if the loan has been taken from spec­i­fied in­sti­tu­tions like banks, hous­ing finance com­pa­nies, gov­ern­ments, pub­lic lim­ited com­pa­nies etc.

I f re­quired, dur­ing t he as­sess­ment pro­ceed­ings you will need to pro­vide proof that the loan given by friends or rel­a­tives was used for the pur­pose of ac­quir­ing or con­struct­ing the house prop­erty. You will also need to ob­tain a cer­tifi­cate from your friends

or rel­a­tives broadly on th­ese lines that a bank gives for tax de­duc­tion pur­poses.

I’m plan­ning to gen­er­ate my CIBIL score as I in­tend tak­ing a home loan. This is the first time that I’m gen­er­at­ing the score. Would you be able to help me with the link and the rel­e­vant de­tails re­quired?

— Shikha Sharma You can get the credit score along with a credit re­port by ap­ply­ing on­line and an­swer­ing three au­then­ti­ca­tion ques­tion cor­rectly out of the five ques­tions re­lated with bank­ing and credit trans­ac­tions. The fee payable for ob­tain­ing the CIBIL score is ` 470 which needs to be paid on­line. The link for the same is http:// www.cibil.com/credit-score

The ques­tions are re­lated to loans and credit cards so please

keep th­ese de­tails handy when you ap­ply on­line for the CIBIL score. If your au­then­ti­ca­tion is suc­cess­ful, you can in­stantly ac­cess your credit score and a soft copy of the same will be mailed to you.

In case you are not able to get the re­port on­line, you can make an ap­pli­ca­tion for get­ting it off­line by fol­low­ing the process de­scribed on the above link by at­tach­ing the proof of pay­ment made. Al­ter­na­tively, you can di­rectly make an off­line ap­pli­ca­tion for the CIBIL credit score and your copy of the credit score will be sent by courier.

You can also get a copy of your own credit re­port with­out the scores by down­load­ing the form and for­ward­ing it to CIBIL with a de­mand draft of ` 154 along with your i den­tity doc­u­ments men-

tioned. CIBIL will send you your credit re­port by post.

I have booked a flat which will be handed over in De­cem­ber 2014. Is pre-EMI a good op­tion in this case?

—Shikha Tonk Pre-EMI is the sim­ple in­ter­est payable on a home loan taken for an under-con­struc­tion prop­erty where the loan dis­burse­ment is linked to the stage of con­struc­tion. This pay­ment does not have any prin­ci­pal com­po­nent and is only made to­wards the in­ter­est on the amount of loan dis­bursed till date. The ac­tual loan re­pay­ment or the reg­u­lar EMI will start only when the en­tire loan amount is dis­bursed to the builders.

What­ever op­tion ( EMI or pre-EMI) you may choose, the re­pay­ment will be based on

ac­tual amount dis­bursed as on date.

You do not get any tax ben­e­fits on any pay­ments made ( whether EMI or pre- EMI in­ter­est) dur­ing the years in which the con­struc­tion is yet to be com­pleted. Tax ben­e­fits for in­ter­est and loan re­pay­ments be­gin only from the year in which the con­struc­tion is com­pleted. How­ever, you can claim tax ben­e­fits be­fore com­ple­tion of the prop­erty in five equal in­stall­ments be­gin­ning from the year in which pos­ses­sion taken. So, if a tax ben­e­fit is your con­sid­er­a­tion, please opt for pre-EMI only. If you want to quickly re­pay the loan, the EMI op­tion will serve your pur­pose.

Harsh Roongta is CEO, Apna Paisa. He can be reached at ceo@ap­na­paisa.com

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