HT Estates - - HTESTATES - Harsh Roongta

I want a home loan for ₹ 50 lakh for a prop­erty for which the agree­ment value is ₹ 1.4 crore. The bank says I will have to bring in mar­gin money equiv­a­lent to 20% of the prop­erty value that is ₹ 40 lakh. I have an­other prop­erty of ₹ 1.1 crore. Should I take a loan against this prop­erty?

—Vivek Sharma If the agree­ment value of the prop­erty you are go­ing to pur­chase is ₹ 1.4 crore and you wish to avail a loan of ₹ 50 lakh, then you need not worry about the mar­gin money be­cause you are go­ing to take a loan equiv­a­lent to 35% of the agree­ment value of the prop­erty (sub­ject to bank’s val­uat ion of th­prop­erty), which is far below the re­quire­ment of max­i­mum loan amount bank can finance.

Your el­i­gi­bil­ity to get the loan will de­pend on your reg­u­lar in­come and outgo- ings, any ex­ist­ing loan be­ing ser­viced, etc. If your present in­come is suf­fi­cient and you have many years of work­ing life left, and a good credit his­tory, you can eas­ily get a home loan. If you are tak­ing a loan to buy a prop­erty, it is ad­vis­able to take home loan in­stead of loan against prop­erty.

Home loans are cheaper than loan against prop­erty and are avail­able for a longer ten­ure (20 to 30 years) against loan against prop­erty, which is avail­able for 5 to 15 years.

Len­ders finance upto 80% (90% for flats val­ued less than ₹ 20 lakh) of prop­erty value as home loan vis-a-vis 50% to 60% for loan against prop­erty. In case you are un­able to get a home loan then take the loan against prop­erty. .

If I be­come a guar­an­tor for a home loan of a rel­a­tive (₹22 lakh), is it ad­vis­able or is it risky?

—Soumi­tra Das­gupta Guar­an­tee­ing a loan is as good as tak­ing a loan for your­self and then lend­ing it to the main bor­rower. It im­pacts your abil­ity to get an­other loan as a part of your in­come is al­ready tied up in ser­vic­ing the ex­ist­ing loan. Thus, a bank treats your guar­an­tee as if you have taken the loan your­self and hence the avail­abil­ity of in­come to ser­vice an­other loan is af­fected. It af­fects your Cibil score. In case your rel­a­tive de­faults in re­pay­ing the loan, it will hurt your credit his­tory too.

I pur­chased a prop­erty under con­struc­tion in Fe­bru­ary 2013 for ₹ 73 lakh. I have paid ₹ 20 lakh to the builder. Fur­ther in­stall­ment pay­ments are to be made now. Do I deduct TDS from each in­stall­ment? Builder claims that TDS on ₹ 73 lakh to is be de­ducted from fi­nal pay­ment at the time of trans­fer/reg­is­tra­tion and not from in­terim in­stall­ments. Please clar­ify.

—Tan­veer Ra­heja The re­quire­ment to deduct tax is on the amount that is be­ing paid after June 1, 2013. So you will have to deduct TDS on ₹ 53 lakh and not on ₹ 73 lakh. As re­gards the time of de­duc­tion of TDS con­tention of your builder is not right. You have to deduct 1% from ev­ery pay­ment that you make to him. Th­ese are ab­so­lutely clear pro­vi­sions in section 194 -IA that pro­vide for de­duc­tion of tax at “the time of credit of such sum to the ac­count of the trans­feror or at the time of the pay­ment of such sum in cash or by cheque or draft or any other mode, which­ever is ear­lier....”.

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