CHEQUE BOOK

HT Estates - - HTESTATES - Harsh Roongta

I own a flat and pur­chased a sec­ond one in Fe­bru­ary this year. The flat was reg­is­tered the same month. Can I claim IT ben­e­fits on the reg­is­tra­tion fee paid by me? If yes, how and to what ex­tent? How do I claim IT ben­e­fits on the EMI that I am pay­ing for this flat (I have taken 80% loan from bank to fi­nance this loan)?

—Arnab Das­gupta Ex­penses in­curred in re­spect of reg­is­tra­tion fee and stamp duty for a house are el­i­gi­ble for de­duc­tion un­der Sec­tion 80C within the over­all limit of ` 1 lakh. You can get tax ben­e­fits on the stamp duty to­gether with other de­duc­tions like re­pay­ment of hous­ing loan, LIC, PF, etc to a max­i­mum of ` 1 lakh each year.

The over­all amount of de­duc­tion can­not ex­ceed ` 1 lakh. How­ever, the property on which the stamp duty has been paid should be com­plete and pos­ses­sion should have been ob­tained by you dur­ing the year. Un­der the pro­vi­sion of the In­come Tax Act, there is no re­stric­tion on the num­ber of prop­er­ties you can take with a hous­ing loan or the num­ber that a per­son can own. How­ever, in case a per­son owns more than one property and all are oc­cu­pied by him or his rel­a­tives, the per­son has to treat one of the prop­er­ties as self-oc­cu­pied.

Once the op­tion to treat a par­tic­u­lar property as self-oc­cu­pied is taken, the other property will be deemed to have been let out and a no­tional in­come equiv­a­lent to the rent ex­pected to be re­alised on such property will be treated as rental in­come in re­spect of the other property.

The an­nual value of the self­oc­cu­pied property is taken at nil and a per­son is en­ti­tled to claim in­ter­est pay­ment for loan taken to ac­quire that property up to a limit of ` 1.5 lakh. He can also claim in­come tax ben­e­fit to­wards re­pay­ment of hous­ing loan within the over­all limit of ` 1 lakh un­der Sec­tion 80 C.

In case both the houses are oc­cu­pied by you, you have to de­cide which one of the two prop­er­ties can be treated as self-oc­cu­pied for the pur­pose of in­come tax. I have ap­plied for a home im­prove­ment loan from a bank, and it is al­most ap­proved. The bank wants me to fur­nish cost es­ti­mates, so that they can give me the amount that I have spent in do­ing up the house. But I do not have much cash to spend. Is it pos­si­ble to get the whole amount be­fore­hand?

—Naresh Gupta Some banks sanc­tion up to 75% of the pro­jected cost as loan amount for home im­prove­ment. How­ever, be­fore the bank dis­burses any por­tion of the loan, you will have to bring in your en­tire con­tri­bu­tion. So once you have spent your con­tri­bu­tion in full, you can re­quest the bank to dis­burse the loan amount di­rectly ei­ther to you or in favour of the con­trac­tor. I work as a cre­ative di­rec­tor and I am paid in cash. I plan to take a home loan, but I’m asked to fur­nish my IT re­turns for the last three years. I do not have these documents but I’m told that if I pay my tax for three years now and sub­mit it as part of my home loan ap­pli­ca­tion, along with my cash vouch­ers, I might be con­sid­ered for a loan. Is it true? What are my op­tions?

—Amit Kataria For avail­ing any credit fa­cil­ity you will have to prove the con­sis­tency of your in­come. If you are work­ing on con­tract ba­sis, the amount payable to you is li­able for de­duc­tion of tax at source if it is more than ` 50,000 per an­num. If you have proof of such tax de­duc­tion reg­u­larly for the past cou­ple of years, it should work. You will need doc­u­mented proof of your in­come. Fil­ing of your in­come tax re­turn in bulk is not go­ing to help you now, as the bank will per­ceive it as be­ing done just for the home loan. Harsh Roongta is CEO, Apna Paisa. He can be reached at ceo@ap­na­paisa.com

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