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HT Estates - - HTESTATES - Harsh Roongta

We need to take a home loan against a house prop­erty which is partly a com­mer­cial area. How­ever, the ownership of this prop­erty is shared be­tween my hus­band and his two sis­ters. Are we still el­i­gi­ble for a home loan against this prop­erty?

— Ran­jana Kapoor If the pur­pose of tak­ing the loan is to pur­chase a res­i­den­tial prop­erty, then it is ad­vis­able to take a reg­u­lar home loan and not a loan against prop­erty. Home loans are cheaper than other loans (in­clud­ing a loan against the se­cu­rity of an ex­ist­ing prop­erty) and you do not have to pro­vide any col­lat­eral se­cu­rity ex­cept the house be­ing pur­chased. Your over­all loan el­i­gi­bil­ity will de­pend on your dis­pos­able in­come and ex­ist­ing bor­row­ings.

You can approach any lender that of­fers home loans. The lender will eval­u­ate your credit his­tory and your dis­pos­able in­come. In ad­di­tion to the above, the loan amount will also de­pend on the value of the prop­erty. Most len­ders nor­mally pro­vide loans up to max­i­mum of 80% (90% for a loan amount below ₹ 20 lakh) of the agree­ment value of a house as reg­u­lar home loan. Home loans are avail­able for a longer ten­ure (up to 30 years) as com­pared to a loan against prop­erty.

Those un­able to get a home loan can take the loan against prop­erty. The process for this is the same as get­ting a home loan, but the rate of in­ter­est for a loan is higher. Of course you can al­ways take a loan against gold as a sup­ple­men­tal loan for any ad­di­tional re­quire­ment or to fund the down pay­ment re­quire­ment. Please note that in case you de­cide to take the loan against prop­erty, all the joint own­ers will have to be­come co-bor­row­ers for your loan.

I am plan­ning to buy a house for which my fa­ther is ready to give me a loan. I will re­pay the EMI to him. How can I claim de­duc­tion for this? What doc­u­ments will I have to sub­mit to the IT depart­ment to claim de­duc­tion of in­ter­est and prin­ci­pal?

— Snighdha Jain

For claim­ing de­duc­tion for the prin­ci­pal por­tion that forms part of your home loan in­stall­ment, the loan should be taken from spec­i­fied en­ti­ties like cen­tral or state gov­ern­ment, any bank in­clud­ing co­op­er­a­tive bank, LIC, Na­tional Hous­ing Bank, any hous­ing finance com­pany, any co­op­er­a­tive so­ci­ety en­gaged in pro­vid­ing loans for fi­nanc­ing con­struc­tion of house, your em­ployer who is a pub­lic com­pany or pub­lic sec­tor com­pany, etc.

Since you are plan­ning to take the loan from your fa­ther, you will not get any in­come tax de­duc­tion for­cap­i­tal re­pay­ment of hous­ing loan.

How­ever, as far as pay­ment of in­ter­est on bor­rowed cap­i­tal is con­cerned, there is no such re­stric­tion. So, you will be able to claim the de­duc­tion of in­ter­est pay- able up to ₹ 2 lakh in case the prop­erty is self-oc­cu­pied or to the ex­tent of in­ter­est payable if the prop­erty is let out.

No doc­u­ments are are re­quired to be sub­mit­ted along with the in­come tax re­turn. How­ever, you will need to ob­tain a cer­tifi­cate from your fa­ther stat­ing the amount of in­ter­est payable for each year, as the same may be de­manded by the in­come tax of­fi­cer at the time of as­sess­ment. You will also have to prove that the loan was used for the pur­pose of buy­ing the prop­erty.

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