Legal FAQs
Q. I have a housing loan from a major bank and I’m availing the income tax benefit on both the principle and interest components for the last four years. In case I take a fresh loan from the same bank for repair and alteration, will the interest portion of the-new loan be considered for the income tax benefit? (Samant Purohit)
Ans. If a fresh loan is used for repair, renewal or reconstruction of the house property, the interest payable on both the loans are eligible for deduction under Section 24 up to Rs.1,50,000 (if the property is self-occupied) and without any limit if the property is let out or deemed to have been let out. You will have to prove that the loan was used for repair, renewal or reconstruction.
Q. I want to partially prepay my home loan taken from the bank. What are the advantages and disadvantages? (Manit Kumar)
Ans. If you have surplus funds and you can prepay a part of the home loan, it will reduce the monthly EMI Burden. Alternatively, you can continue with the same EMI and in that case your loan tenure will come down. Banks will not charge prepayment penalty if the loan is prepaid partially. The definition of what constitutes partial pre-payment varies from bank to bank. This will ensure savings in pre-pay-ment penalty and at the same time help you to save on high interest costs on a substantial portion of the loan. However, before you decide to prepay a home loan, it is in your interest to first clear off all unsecured dues like credit card dues and personal loans. Also, make sure that you have some money set aside to meet emergency expenses. Please take into account impact on your tax outgo before you decide to prepay your loan. You can consult a personal finance advisor to advise you regarding this.
Q. I am a South African citizen married to an Indian citizen. We live in South Africa and have a home loan with a SA bank. Will it be possible for my Indian wife to take a home loan from India to pay for our house in SA? (James Zuma)
Ans. To the best of our knowledge no Indian bank provides loans for acquisition of property or refinancing a home loan in another country.
Q. What is an insurance cover on a home loan? (Radhika Sachdeva)
Ans. There is no mandatory insurance cover that is available on a home loan. You need to pay extra to buy these policies. There are three kinds of policies available:
- In the event of your death or disability resulting in loss of income, a sum of money will be made available towards the repayment of your loan
- Critical illness: Home loan insurance will also cover critical illness. But it excludes intentionally self-inflicted injury or attempted suicide
- Property insurance: This provides protection against most risks to property, such as fire, theft and weather damage.
Q. A few years ago, my mother inherited life interest in our house under my deceased father’s will. Unfortunately, I do not have cordial relationships with my two siblings. My mother is now contemplating gifting this property to my siblings and exclude me. How can I protect my share? (Simran Singh)
Ans. Since your mother has inherited only life interest/life estate in this particular property under your father’s will, she is not free to bequeath, sell, gift, mortgage or alienate this property in any manner during her lifetime. On her demise, the property shall stand bequeathed to the ultimate beneficiaries named in your deceased father’s will. On the other hand, if the ultimate beneficiary/beneficiaries of this property have not been named in your deceased father’s will, equal share in this property (one-third each) shall stand bequeathed to all three siblings, upon your mother’s demise.
Q. I have recently purchased a floor in a three-storied building. Who is entitled to keep the previous chain of title deeds with respect to this property? (Sambuddh Sen)
Ans. You shall be entitled to keep the original sale deed executed by the seller in your favour. However, since the seller is retaining part of the property which is mentioned in the sale deed, he is entitled to retain the chain of previous title deeds of this property.
Q. I want to gift my plot in Delhi. Is the cap on maximum registration fee payable in Delhi still applicable? (Samit Srivastava)
Ans. As per the notification by Lt Governor (Delhi), which took effect from June 10, 2011, registration fee for gift deed in Delhi is calculated at 1% of the consideration amount set forth in the document or the value as per the prevailing circle rate – whichever amount is higher, and subject to a minimum fee of Rs.1,000. This notification has done away with the maximum cap of Rs.50,000 which existed earlier.
Resource:HT, Purpose of FAQs are help to the Buyer/Sellers of Properties.
