With Interest Rates at all time low, this is the right time for everyone to own their dream home.
Lalani Group homes can be financed through leading financial institutions & banks. Please contact us to get details of approval numbers for our various ongoing projects & any other detail at email@example.com
Step 1 Approach a Housing Finance Company with the latest salary slip and TDS Form 16 of the last two financial years of yourself and your co-applicant. The loan officer will informally tell you the amount of loan you are eligible for, the areas in which they finance flats and the terms of the same. Collect a loan application form and confirm the needed documents (mainly proof of income). Visit more than one company since you are likely to get better terms/ larger loan amount if you shop for the best deal.
Step 2 At your chosen HFC, submit the duly filled loan application, along with the requested documents and an application fee (around 1%). They will then interview you on the same. After conducting an appraisal of your application, the HFC will give an in-principle sanction of your loan.
Step 3 You now have to submit your property documents, which should show a clear title. The HFC will check these and levy an administrative fee (around 1%). It will then disburse the loan, either fully or in installments, directly to the builder/ seller of the flat.
A number of factors such as your income, age, number of dependents, qualifications, assets and liabilities, income stability/ continuity of your employment / business etc. are taken into account when assessing your repayment capacity. However, there are ways by which you can enhance your eligibility: If your spouse is earning, add him/her as a co-applicant. The additional income shall be included to enhance your loan amount. Incidentally, if there are any co-owners they must necessarily be co-applicants. Did you know that your fiancée’s income could also be considered for sanctioning the loan on your combined income? The disbursement of the loan, however, is done only after you submit proof of your marriage. Providing additional security like bonds, fixed deposits and LIC policies may also help to enhance eligibility. While there is no need for a guarantor, having one might enhance your credibility with us. If so, our loan officer would provide you with the necessary details. However, the final amount to be sanctioned will depend on your repayment capacity. In the total cost, registration charges, transfer charges and stamp duty costs are included.
You may be asked to submit further legal documents if required by the bank or its approved lawyers. Retain photocopies of all the documents being submitted by you.
In reducing balance you reduce the amount of principal payment already paid by you from the initial loan amount. You pay interest only on principal unpaid till that point of time and not the entire loan amount.
In a floating interest rate, you interest payment will vary according to the market lending rate. If interest rates rise your interest payments will rise and vice-versa. You bear the risk of interest fluctuations in the market. Floating rates are slightly cheaper than fixed interest rates.
In a fixed interest rate, your interest rate is fixed over the entire tenure of loan.
|Sections in the IT Act
Nature of home loan deduction in income tax
|Maximum amount deductible
|Tax deductions on the principal repayment
|Rs. 1.5 Lakh
|Tax deductions on the interest amount payable
|Rs. 2 Lakh
|Additional home loan interest tax benefit for first-time home buyers
The Government of India extends these benefits as a form of relief to borrowers, making it more affordable.
On availing a home loan, you need to make monthly repayments as EMIs, which include two primary components – principal amount and interest payable. The IT Act enables borrowers to enjoy tax benefits on both these components individually.1. Section 80C
Claim a maximum home loan tax deduction of up to Rs. 1.5 Lakh from your taxable income on the principal repayment. This may include stamp duty and registration charges as well but can be claimed only once.2. Section 24
Enjoy maximum deductions of up to Rs. 2 Lakh on the interest amount payable. These deductions apply only on the property whose construction is finished within 5 years. If it doesn’t finish within this time frame, you can claim only up to Rs. 30,000.3. Section 80EE
First-time home buyers can claim an additional Rs. 50,000 on the payable interest every financial year. The Home Loan amount must not be more than Rs. 35 Lakh. The property’s value must be within Rs. 50 Lakh.Some Other Conditions to Note:
In case of a home loan jointly, every borrower can enjoy tax benefits on joint home loan from his/her taxable income individually. One can claim a maximum of Rs. 2 Lakh on the interest paid and up to Rs. 1.5 Lakh on the principal amount. Any family member, friend or even the spouse can be a co-borrower of a Joint Home Loan from Bajaj Finserv. The only condition is that every applicant of the housing loan must be a co-owner of that residential property.
If you take a second home loan to purchase another property, tax benefits are applicable on the payable interests. Here, you can claim the entire interest amount paid as no cap is applied here. Currently, individuals can claim only one property as self-occupied and make tax payments on the other based on notional rent. In the February 2019’s Interim Budget, a proposal has been put forward stating that an individual can claim a second home as self-occupied property. This aims to help borrowers save more in the form of taxes.
The process to claim tax benefits on a home loan is easy and simple.1. Make sure the residential property is in your name. In case of a joint home loan, ensure to be the house’s co-owner.
Self-employed borrowers need not submit these documents. They must keep these handy to provide if a query arises in the future.
Home loan repayment is eligible for tax deductions under the Income Tax Act 1961. Home loan interest paid up to Rs. 2 lakh per year is tax deductible u/s 24. Section 80C allows deduction against principal repayment of up to Rs. 1.5 lakh every year. Additional deductions are available u/s 80EE and 80EEA.
The maximum tax deductible for a home loan is listed below under specified sections of the Income Tax Act 1961.• Up to Rs. 2 lakh u/s 24 for self-occupied house; no limit for non-self-occupied house.
A person who has purchased a new house for self-occupation or to rent out can claim tax exemption on home loans u/s 24, 80C and 80EEA of the Income Tax Act 1961. You can also claim tax benefits if you are a co-owner of the house or a co-borrower.
Yes, you can claim home loan tax benefits for a property under construction u/s 80C. The following rules apply for such deduction.• If the construction is completed within 5 years, a deduction of Rs. 2 lakh is applicable.
Premiums paid for a home loan protection insurance plan are tax deductible under section 80C of the Income Tax Act 1961 only if the borrower makes repayment. Under specific circumstances, where the lender finances such insurance plan and the borrower repays via loan EMIs, deductions are not allowed.
A home loan top up is eligible for tax deduction u/s 24(b) and 80C only if it is used for –• Acquisition/construction of a residential property.
Such a claim should also be backed up with valid receipts and documents.
Tax benefits are available to consumers of house loans for the interest component as well as the principal component of the housing loans. The current budget has left the upper limit of the interest payment deduction at Rs. 150,000 per annum. Section 88 also allows tax benefits on principal repayments.
Stamp Duty is a tax collected by the Government on every document by which any right, title, interest or liability is created, transferred, extended, extinguished or recorded. Since the values of transactions in the real estate market tend to be quite high, the amount of stamp duty is also a large amount.
The only exception to Stamp Duty is when the property is transferred through “Will” of a deceased person. All other transfer documents like an agreement to sell, development agreement, Conveyance Deed, Gift Deed, Mortgage Deed, Exchange Deed, Deed of Partition, Power of Attorneys, lease deeds, etc. have to be property stamped before registration.
Market Value of Flat = Carpet Area x 20% x Ready Reckoner Value of that Area
Stamp Duty = 5% on Market Value or Agreement Value (whichever is higher)
Registration Fee for Sale Agreement is 1% of the market value or agreement value (which ever is higher) subject to Maximum of Rs. 30,000 (from 1- 4 – 2003)
GST does not apply to sale of completed properties (where completion certificate has been issued) or to the resale of old properties.
Following GST rates are applicable on under construction properties
|Type of Real Estate Property
|GST Rate (w.e.f. 01-Apr-2019)
|Residential Property (affordable housing segment)
|1% without ITC
|Residential Property (non-affordable housing segment)
|5% without ITC
|12% with ITC (unchanged)
GST Council Definition of Affordable Housing Segment
The GST Council has announced the applicable criteria for eligibility of a residential property in the affordable housing segment as part of the 33rd GST Council Meeting press release. The following are the key affordable housing segment qualifying criteria for a residential property in India:
For purposes of this definition, metropolitan areas in India include Delhi NCR (limited to Delhi, Noida, Gurgaon, Faridabad, Ghaziabad and Greater Noida), Kolkata, Chennai, Hyderabad, Bengaluru and Mumbai (entire Mumbai Metropolitan Region).
Any person of Indian origin (Indian Citizen) living abroad for purpose of education, employment, carrying on business etc. for an long duration abroad is a non-resident Indian. Non-residents foreign citizens of Indian Origin are also treated on par with non-resident Indian Citizens (NRI’s) for purpose of certain facilities.
No. Non Resident Indians are allowed to make real estate investments in India without any cap on quantity or the number of investments.
There is no restriction or condition on payment on buying a property. The normal banking channels are applicable.
Remittance from abroad through normal banking channels. NRO accounts in India. (Deposits in dollars opened by residents or non-residents). NRE (Non Resident External Rupee accounts)
FEMA stipulates that before making a purchase, special form called the IPI 7 needs to be filed with the central office of the RBI along with the title deed or any other certified copy of the document proving that the NRI has executed an agreement to purchase the property within the country within 90 days of the purchase of property along with bank certificate stating consideration paid for the purchase.
Reserve Bank has granted general permission to foreign citizens of Indian Origin, whether resident in India or Abroad, to purchase immovable property in India for their bona fide residential purpose. They are, therefore, not required to obtain separate permission of Reserve Bank
FEMA says no matter what the proceeds of the sale may be, the amount for repatriation should not exceed the amount paid for acquisition of the immovable property in foreign exchange received.
The Reserve Bank has granted general permission to certain financial institutions, like HDFC, LIC Housing Finance Ltd., to grant housing loans to non-resident Indian nationals for acquisition of houses/flats subject to certain conditions.
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