I have booked a flat in NCR and will get possession by the end of this year.My bank has started home loan installments. Can I claim this amount of EMIfor my income tax rebate for the current financial year 2014-15?
—Jyoti Rastogi As far as tax deduction is concerned the legal position is clear – the tax deduction becomes available only from the financial year in which the construction is completed (in your case the financial year ending March 31, 2016). Assuming the possession of the flat is given in the last quarter of year 2015 the answers are as follows:
Aggregate of all the interest payable till March 31, 2015, will be available to you as a deduction in five equal installments beginning from the financial year ending March 31, 2016, ie one-fifth of the aggregate interest will be available beginning from the year in which you take possession of the property. This deduction along with the interest payable for the financial year will be subject to a limit of R2 lakh if the property is self-occupied.
Any principal portion of the loan repaid till March 31, 2015, ie the year prior to the one in which you get the possession will not be eligible for any deduction and the tax benefit in respect of this is lost forever. I have purchased a DDA flat in Delhi in which my brother is co-owner. We each have 50% share. The housing loan taken for purchase of this property is also in the joint names of myself and my brother. Initially we both pay 50% each of EMI for housing loan. But now it is only me who is paying EMI. Now I want to get the flat transferred in my name as per our mutual understanding. What are the steps we need to take or procedures need to be followed for legal transfer of the flat only in my name. As housing loan is still there. How to involve bank in this. Please suggest.
—T R Rakesh Any change in ownership can only be done with the consent of the bank and at its sole discretion, You will have to pay the stamp duty and registration charges on the basis of value of the property as on today.
Your brother will have to execute sale deed or gift deed in your favour. Even if the property is shown as gifted, the documents will need to be stamped and registered. Various states have lower stamp duty rates for the gifts made to specific relatives and you can take advantage of the relaxation of charges if applicable to you.
You should submit a fresh loan application and request the bank to transfer the outstanding loan amount to your new laccount to foreclose the existing home loan. However, this is only possible if your income is sufficient enough to service the outstanding loan amount and if have a good repayment track record.
Where DDA is concerned, I would suggest that you visit the DDA website which provides all information and formats of affidavits and indemnity bonds required to delete the name as co-registrant from registration. Please let me know if loans on construction-linked basis are eligi- ble for income tax rebates?
—Vanita Mehra In respect of interest and repayment of home loans under-construction property, you can get tax benefits only from the financial year in which the construction is completed. For the interest paid during the construction period, you can claim the total interest paid during the construction period in five equal installments beginning from the year in which the construction is completed. This claim of interest will be within the overall limit of ₹ 2 lakh in case the property is self-occupied.