HT Estates - - HTESTATES - Harsh Roongta

I’m aware that in­ter­est on a home loan for an under-con­struc­tion prop­erty can be claimed in five equal in­stal­ments in five years after the pos­ses­sion of the prop­erty. Please clar­ify if it is com­pul­sory to take the claim in the first five fi­nan­cial years from pos­ses­sion or if it can be taken later too.

— San­jay Singh In­ter­est on hous­ing loan on an under-con­struc­tion prop­erty has an el­e­ment of ‘pre­con­struc­tion pe­riod in­ter­est’ which be­longs to the pe­riod start­ing from the date of bor­row­ing up to the end of the fi­nan­cial year im­me­di­ately prior to the fi­nan­cial year in which con­struc­tion was com­pleted. As per in­come tax pro­vi­sions, the pre­con­struc­tion pe­riod in­ter­est can be claimed as de­duc­tion in five equal in­stal­ments start­ing from the fi­nan­cial year in which con­struc­tion was com­pleted and the next four years.

Hence, it can be claimed

Apart from home loan in­ter­est rate, what other in­cen­tives should I ne­go­ti­ate from the bank?

— Vikram Shri­vas­tava You can ne­go­ti­ate with banks for the fol­low­ing in ad­di­tion to the in­ter­est rate while avail­ing a home loan: waiver or re­duc­tion in pro­cess­ing fee and pre-pay­ment penalty charges and free prop­erty in­sur­ance.

I have a home loan from an in­sur­ance com­pany but am yet to get pos­ses­sion of the unit. I have paid the amount to the builder. Can I get the home loan can­celled?

— Harsh­vard­han Singh As­sum­ing that a part of the loan has al­ready been dis­bursed to­wards the under con­struc­tion prop­erty, you will have to pay back the loan dis­bursed as well as a pre­pay­ment penalty (if any) if you want to can­cel the loan. If the loan has been sanc­tioned re­cently, you can al­ways de­cide not to avail the dis­burse­ment of the loan with­out any fur­ther li­a­bil­ity on your part, but you may lose the amount paid as pro­cess­ing fee.

I had ap­plied for a home loan from a finance com­pany but it was re­jected. How­ever, they charged a pro­cess­ing fee of ₹ 2,247. Is it le­gal to do so?

— Ma­hesh Bhalla Pro­cess­ing fee is charged to get the loan ap­pli­ca­tion pro­cessed. This fee is non-re­fund­able in most cases. If you ex­am­ine the loan ap­pli­ca­tion form, you will most prob­a­bly see a line in bold print that says that the pro­cess­ing fee is non-re­fund­able. How­ever, if you have been promised that the fee will be re­funded if the loan is not sanc­tioned, you should lodge an of­fi­cial griev­ance with the lender.

Can I take a home loan from my fa­ther? If yes, how much can I bor­row and will I be el­i­gi­ble for all types of de­duc­tions for in­stal­ment and in­ter­est re­pay­ment?

— Su­mit Sax­ena There are no com­pli­ca­tions on tak­ing a home loan from your fa­ther or rel­a­tives. In re­spect of the loan taken from your fa­ther, you will be able to claim de­duc­tion for in­ter­est payable on such a loan. You will have to ob­tain and keep on record a cer­tifi­cate of in­ter­est payable for hous­ing pur­pose. How­ever, you will not be able to claim any tax de­duc­tion ben­e­fits for the prin­ci­pal amount of loan re­paid to your fa­ther under section 80 C.

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