CHEQUE BOOK

HT Estates - - HTESTATES - Harsh Roongta

I want to buy a house in Canada for my son who is study­ing there. Can I buy an apart­ment for him by sell­ing prop­erty in In­dia? How much should I ide­ally spend for this pur­pose?

—Manju Yes, you can cer­tainly buy a house in Canada as RBI al­lows In­dian res­i­dents u/s Sec­tion 10 (4) and 11 (1) of the For­eign Ex­change Man­age­ment Act, 1999 (42 of 1999) to send up to $1,25,000 per year for any pur­pose, in­clud­ing buy­ing any im­mov­able prop­erty out­side In­dia. How­ever, since you want to do this by sell­ing your ex­ist­ing prop­erty in In­dia, you will not be able to claim cap­i­tal gains ex­emp­tion un­der Sec­tion 54, in case the ex­ist­ing prop­erty be­ing sold is a res­i­den­tial house; or un­der Sec­tion 54 F (in case the prop­erty to be sold in In­dia is other than a res­i­den­tial house).

The Fi­nance Act 2014 has amended th­ese pro­vi­sions and has specif­i­cally pro­vided that the cap­i­tal gains ex­emp­tion un­der Sec­tion 54 or 54F can­not be claimed in case the res­i­den­tial house prop­erty to be ac­quired is sit­u­ated out­side In­dia.You can save tax by buy­ing any other res­i­den­tial prop­erty in In­dia or by in­vest­ing the cap­i­tal gains in cap­i­tal gains bonds of up to ₹ 50 lakh in a year. My brother has taken a bank loan for a prop­erty. He wants to gift a part of it to me. Can he do it?

— Ra­jiv Bhatt Your brother can cer­tainly sell or gift part of the prop­erty to your name. Any change in own­er­ship can only be done with the con­sent of the lender. The lender may re­quire him to pay off the loan first or you may be re­quired to be­come a co-bor­rower for the loan. It will also en­tail stamp duty and reg­is­tra­tion ex­penses. Var­i­ous states have lower stamp duty rates for gifts made to rel­a­tives and you can take ad­van­tage of the re­lax­ation of charges, if ap­pli­ca­ble to you. Can I take a joint loan with my sis­ter? By tak­ing it jointly, our loan el­i­gi­bil­ity will in­crease.

— Ankur Dutta It is very un­likely that the lender will al­low your sis­ter to join you as co-bor­rower for the loan. Nor­mally lenders al­low im­me­di­ate kin like spouse, par­ents, son as cobor­row­ers to the loan and a few lenders even al­low brothers as co-bor­row­ers. Most banks will pro­vide a loan to brothers on a case-to-case ba­sis, but it might be more dif­fi­cult for a com­bi­na­tion of brother and sis­ter. If you can con­vince the bank that the in­come of the bor­row­ers will con­sti­tute a sin­gle eco­nomic unit and is likely to re­main so in the fore­see­able fu­ture, they may agree. I have been work­ing for the last five years and my monthly in­come is ₹ 25,000. I want to pur­chase a prop­erty cost­ing ₹ 30 lakh. What is the loan amount I’m el­i­gi­ble for?

— Abishek Sing­hal Banks can grant loan up to a max­i­mum of 80% of the agree­ment value of the prop­erty as a home loan. The over­all el­i­gi­bil­ity will be based on your in­come, your reg­u­lar out­go­ings and re­pay­ment track record. If you are be­low 40 years of age, banks will nor­mally lend up to four or 4.5 times your gross an­nual in­come. You should be el­i­gi­ble for an ap­prox­i­mate loan amount around ₹ 12 lakh at 10.15% - 10.25% pa for a ten­ure of 20 years pro­vided you have no other loans to ser­vice. Hence, your down pay­ment will con­sid­er­ably go up. You can, how­ever, add your earn­ing spouse/par­ents as a co-bor­rower. Harsh Roongta is CEO, Apna Paisa. He can be reached at ceo@ap­na­paisa.com

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