Both me and my husband are salaried employees. If we take a joint loan and buy an apartment as coowners, does it mean that both of us can avail tax benefit of ₹ 1.5 lakh against the principal and ₹ 2 lakh against interest? And that the combined benefit will be around ₹ 7 lakh? Also, if it is a self-occupied property, am I allowed to pay rent for another property in the same city? Can I claim home loan tax benefits for a self-occupied property and HRA for a rented property?
- Rekha Shah Yes, you can. If you and your husband are owners or coowners of the property you can get tax benefits for home loan repayment as well as for interest payment as per your share in the loan. Tax benefits will also be available for each of you separately under Section 24 (interest payable on the loan) limited to ₹ 2 lakh each if the property is self- occupied and under Section 80C to an extent of ₹ 1.5 lakh (for the principal repaid) as per the ratio of the loan. You can claim exemption for HRA for actual rent paid in a rented house not belonging to you. Which city the rented house is in will not make any difference to claim the exemption. What is important is that you should be able to prove that you are actually paying rent for the house that does not belong to you. I have taken a loan of ₹ 8 lakh from a bank for 15 years. What are the prepayment charges? Can I repay it in less than 15 years?
- Sanjay Jha You can go ahead and repay your home loan. There are no prepayment charges if the home loan is a floating rate home loan. I have taken a home loan worth ₹ 50 lakh from a bank. The interest charged is higher than the prevailing rate. Should I take a loan from a bank that is offering the home loan at a lower rate?
-Sanjeet Srivastava Yes, you will be able to do that if you have maintained a good track record with your existing lender. Try and check with your lender whether they can offer you a lower rate on payment of a fee of around 0.29% of the principal loan outstanding. That may be more expensive than shifting your loan but What is the difference between getting a loan from a housing finance company and bank at the same rate of interest? Will my floating rate depend upon RBI guidelines? What is better - a bank or a housing finance company?
-Siddharth Guha If the applicable rate of interest is the same, then the future movement of the floating rate will be an important consideration in deciding the lender. The banks follow RBI guidelines and the housing finance companies are required to follow National Housing Bank (NHB) guidelines. Between the two, RBI guidelines are clearly more transparent and hence other things remaining the same, a bank as a lender is preferable to a housing finance company.
No prepayment charge is applicable to a floating rate home loan