To be eligible for a home loan, the applicant must -

• Be at least 21 years of age
• Have a regular salaried income or income under business and profession.
• Possesses income statement of preceding 6 months

The loan must be repaid-On or before the applicant turning 65 years of age

Loan Amount

The loan amount depends on various factors like age, income, number of dependents, qualifications, assets and liabilities, income stability, business, profits, etc. However, there are ways in which the eligibility to obtain loan and the loan amount can be increased. If a spouse or fiancée is earning, applying together as co-applicants ,it can boast the chances of a larger loan amount. In such cases, proof of marriage must be submitted. On the contrary, if there are any co-owners, they must mandatorily be co-applicants. Providing additional security like bonds, fixed deposits and LIC policies may help in enhancing the eligibility to obtain loan.. However, the most important factor in sanctioning loans is the ability to repay. The total cost includes registration charges, transfer charges and stamp duties.

Documents required

Documents required for self-employed persons:

• Updated pass book or photocopy copy of the applicant’s statement of accounts for the past 6 months
• A photocopy copy of the applicant’s ration card
• A profile of the applicant’s business mentioning the nature of business, client list, suppliers, employee strength, geographical spread, etc.

In case of a business partnership

• Updated pass book or photocopy copy of the applicant’s statement of accounts for the past 6 months
• A photocopy copy of the applicant’s ration card
• A profile of the applicant’s business mentioning the nature of business, client list, suppliers, employee strength, geographical spread, etc.

In the case of a proprietor or professional -

• 3 years Profit & Loss a/c
• Balance Sheet
• Income Computation certified by a Practicing Chartered Accountant
• Income Tax Return file statement for 3 years is required.

If the company applying for a loan is a Private Limited Company -

• A remuneration certificate, the board resolution for fixing remuneration
• Annual report of the company
• Assessee's income tax returns of preceding 3 financial year

Documents required for employed persons:

• Latest salary certificate or the original slip
• A photocopy copy of Form no.16 A (TDS Form) from the applicant’s employer
• The original certificate from the applicant’s employer for any other allowances that are not reflected in the applicant’s salary slip
• A photocopy copy of the applicant’s updated bank pass book or a statement of the applicant’s accounts for past 6 months
• A photocopy copy of the applicant’s voter I.D. card or the applicant’s Company's I.D. or the applicant’s passport/ ration card
• A passport size photograph of the applicant & co-applicant

Disbursement

The loan will be sanctioned after the selection of property and submission of the required legal documents. The process might take some time verification and authentication purposes. The 230 A Clearance of the seller and / or 37I clearance from the appropriate income tax authorities (if applicable) is also required. Once the above has been submitted and verified, the registration of the conveyance deed, investment of the applicant's own contribution and the loan amount will be disbursed by the bank. The disbursement will be in favor of the builder.

Documents required for disbursement:

• Loan agreements
• Disbursement requests
• Post-dated cheques
• Personal guarantor's documents

We offer special home loan packages from:

We also offer you home loans from other leading banks and financial institutions.

The Non-Resident Indians (NRIs) are recognized under the Foreign Exchange Regulatory Act, 1973. According to RBI guidelines, NRI - "An Indian citizen who holds a valid documents like Indian passport and stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of staying abroad is a NRI."

Broadly categorized, Non-Resident Indians qualifying for NRI housing loans are:

• Indian citizens who stay abroad for employment or for carrying on business or vocation outside India or for any other purpose in circumstances indicating an indefinite period of stay abroad
• Government servants who are posted abroad on duty with the Indian missions and similar other agencies set up abroad by the Government of India where the officials receive their salaries from Government resources
• Government servants deputed abroad on assignments with foreign Governments or regional/international agencies like the World Bank, Economic and Social Commission for Asia and the Pacific (ESCAP) International Monetary Fund (IMF), World Health Organization (WHO)
• Officials of the State Government and Public Sector Undertakings deputed abroad on temporary assignments or posted to their branches/offices abroad.

Documents required for Resident Indians as well as for NRIs for getting Home Loans are different.
Home loans For NRIs are available for construction of new house/ flats, purchase of old house/ alteration to an existing house and repairs/ flat addition/ renovation etc. NRIs can avail of loans by mortgaging an existing residential property. For availing home loans, NRIs’ have to fulfill certain conditions according to provisions of the Income Tax Act. They should have stayed in India for a period of 182 days or more within an assessment year or they should have stayed in India for at least a total of one year or more.
The FDI Policy that permits FDI up to 100% from foreign/ NRI investor under the automatic route has boosted NRI confidence. Banks have attractive NRI housing schemes to accommodate the housing needs of NRIs. From the stables of HFCs, NRI housing finance plans with suitable repayment options are available.
NRIs should take care while selecting their home loan provider companies or HFCs. Considering the geographical distances involved, it is important that loan seekers associate with a proactive and responsive HFC.

Eligibility for NRI

The eligibility criteria of NRIs differ from Resident Indians based on a few criterion. The criterion include:
Age: The loan applicant should be at least 21 years of age.
Qualification: The NRI loan seeker should be a graduate.
Income: The loan applicant should have a minimum monthly income of $ 2,000 (although, this criterion may differ across HFCs). The eligibility is also determined by the continuity stability of your employment or business.
Payment options: The NRI has to route his/her EMI (Equated Monthly Installments) cheques through his/her NRE/NRO account. He/She cannot make payments from another source for example, his savings account in India.
Number of dependants: The eligibility of the applicant is also determined by the number of dependents, assets and liabilities. An NRI applicant is eligible to get a home loan ranging from a minimum of Rs 5 lakhs to a maximum of Rs 1 crore, based on the capacity of repayment and the cost of the property, which although is variable by the priorities of the home loan provider. Home Loan Tenure for NRIs is different from Resident Indians. An applicant will be eligible for a maximum of 85% of the cost of the property or the cost of construction as applicable and 75% of the cost of land in case of purchase of land, based on the capacity of repayment of the borrower. However, a NRI can enhance his loan eligibility by applying for home loans with a co-applicant who has a separate source of income. Also, the rate of interest for home loans to NRIs is higher than what is offered to Resident Indians. The difference is upto 0.25%-0.50%. Some HFCs also have an internally earmarked 'negative criterion' for NRI home loans. The NRIs who come from locations that are marked as being 'negative' in the books of HFCs, find it difficult to get a home loan.
RBI directive loans: The Reserve Bank of India (RBI) has clarified that NRIs and Persons of Indian Origin (PIO), purchasing immovable property in India should pay for the acquisition by funds received in India through normal banking channels by way of inward remittance from outside the country.

The NRIs and Resident Indians can also acquire immovable property in India other than agricultural property, plantation or a farmhouse. It has issued certain directive for sanctioning home loans to Non-Resident Indians. The guidelines provided are:

• The home loan amount should not exceed 85% of the cost of the dwelling unit, as the remaining amount that is 15% needs to be provided an own contribution towards the cost of unit financed.
• The cost of dwelling unit which is own contribution financed less the loan amount, can be met from direct remittances from abroad through normal banking channels, the Non-Resident (External) [NR(E)] Account and /or Non-Resident (Ordinary) [NR (O)] account in India.
• However, repayment of the loan, comprising of the principal and interest including all the charges are to be remitted to the HFC from abroad through normal banking channels, the Non-Resident (External) [NR(E)] Account and /or Non-Resident (Ordinary) [NR (O)] account in India.

The repayment option for NRIs as they can pay through the funds held in any non-resident account maintained in accordance with the provisions of the Foreign Exchange Management Act, 1999, and the regulations made by the RBI from time to time. As most of the home loan provider companies consider the economical stability of the applicant, home loans for NRIs are quite feasible, because they are well in economic resource.

Making payments

• Non-resident Indians holding Indian passport do not require any permission from RBI for acquiring immovable property for bonafide residential purposes.
• Non-resident Indians holding Indian passport may pay the purchase consideration either by remittance of funds from abroad through normal banking channels or out of NRO/ NRE/ FCNR account.

Documents required for Loan:

The documents required to be submitted by the NRIs are different from the Resident Indians since they are required to submit additional documents, like copy of the passport and a copy of the works contract, etc. NRIs also have to follow certain eligibility criteria in order to get Home Loans in India. Another vital document required while processing an NRI home loan is the power of attorney (POA). The POA is important because, since the borrower is not based in India; the HFC would need a 'representative' 'in lieu of' the NRI to deal with and if needed. Although not obligatory, the POA is usually drawn on the NRI's parents/wife/children.

The documents needed for obtaining NRI home loans are:

• Passport and Visa
• A copy of the appointment letter and contract from the company employing the applicant.
• The labor card/identity card (translated in English and countersigned by the consulate) if the person is employed in the Middle East Salary certificate (in English) specifying name, date of joining, designation and salary details.
• Bank Statements for the last six months

Property Documents:

• Original title deeds tracing the title of the property for a minimum period of the last 13 years.
• Encumbrance Certificate for the last 13 years.
• Agreement of sale /construction, if any
• Receipts for payments made for purchase of the dwelling unit.
• Approved plan / license.
• ULC clearance /conversion order etc.
• Receipts for having invested the margin money through normal banking channels from the Non-Resident (External) account in India and / or the Non-Resident (Ordinary) account in India.
• Latest tax paid receipt.
• Allotment letter from the co-operative society / association of apartment owners.
• Agreement for sale / sale deed /detailed cost estimate from Architect / Engineer for property to be purchased / constructed /extended / improved.
• Copy of approved drawings of proposed construction/purchase/extension.

Additional documents to be submitted by Person of Indian Origin
Photocopy of PIO card. If the PIO card is not available, photocopies of any of the following documents:

• The current passport, with birthplace as 'INDIA'
• The Indian passport, if held by the individual earlier.
• Parents/grandparents Indian passport/birth certificate/marriage certificate substantiating the individual’s claim as a person of Indian origin.

Stamp Duty:

• A stamp duty paid document is considered a proper and legal document and as such gets evidentiary value and is admitted as evidence in the court of law. The documents that are insufficiently stamped are not admitted as evidence by court.
• Stamp duty is payable under Section 3 of The Bombay Stamp Act, 1958.
• Stamp duty is payable on market value or agreement value whichever is higher.
• Market value of any property is determined by the stamp duty authorities on the basis of the Stamp Duty Ready Reckoner issued by the government on April 1st every year.
• Stamp duty for residential property is Rs. 7600/- plus 5 % of the value above Rs. 5, 00,000/- for the time being in force.
• Stamp duty for non residential property is flat 5 %.
• Stamp duty is charged, for every Rs. 500/- or part thereof of the value.
• Stamp duty must be paid at the time of execution of the agreement. Penalty for late payment of the stamp duty is 2% per month on deficit stamp duty amount, subject to maximum four times of the deficit stamp duty amount.

Registration Fees:

• Once the stamp duty is paid on the document, it has to be registered with the Sub Registrar of Assurances of the respective district. The document is to be registered according to the provisions of The Registration Act, 1908.
• The document should be registered within 4 months from date of execution.
• All parties executing the document admit before Sub Registrar of Assurances that they have executed the document presented for registration. Parties are then identified by two independent witnesses.
• Parties to the document are photographed and their left hand thumb impression is taken and such photograph and thumb impression is affixed on additional pages attached to the document apart from colour photographs and thumb impression which a person affixes in agreement value while executing a document.
• The Sub Registrar of Assurances records the content of the document, including the additional pages, either by photocopying or scanning the content of the documents.
• If a particular document is required to be compulsorily registered under the law and is not registered then the proper legal title will not pass on the purchaser i.e. the title will be defective and document becomes inadmissible in the court of law.
• Registration fees is 1 % of the market value or agreement value whichever is higher, subject to a maximum of Rs. 30,000/-.
• The property Agreement executed before obtaining O.C. is subject to service tax at 2.575%.
• There is also VAT (Sales Tax) applicable at 1% of agreement.

When buying a property with loans from specific financial institutions, tax authorities provide certain benefits and exemptions from tax payments.

Section 24 of the Income Tax Act states that an investor is allowed to deduct an amount equivalent to the total interest payable on the housing loan from his/her taxable income within the same financial year. If an investor were to take a loan, he/she would receive a deduction of up to 1.5 lakhs on the interest rate paid. The only concern is that the property would have to be bought or constructed within 3 years from the end of the financial year in which the loan was taken and would have to be self-occupied.

According to Section 80C of the Income Tax Act: A deduction u/s 80C (2) (xviii) is available on repayment of the principal during a financial year of up to Rs. 1,00,000/-, this aforesaid limit is within the overall limit of Rs 1 lakh, specified in section 80C of the Income Tax Act. Stamp duty, registration fee or other such expenses paid for the purpose of transfer of such house property to the assessee is also considered under this amount. This deduction is taken from the Gross Total Income.

FAQ

• Can a NRI (Non Resident Indian) avail of a housing loan?

Yes, NRIs can avail a NRI housing loan to buy a property in India. However, the loan disbursement process as well as the terms & conditions for a loan taken by a NRI are different than regular home loans granted to Indian residents.

• I intend to co-own the property with my brother, sister, father, mother. Will I be eligible for a loan?

You would not be eligible for a loan as most home loan lenders allow only immediate relatives to co-own a property meaning that a parent-son combination and a husband-wife combination are only allowed.

• I’m a single woman. Can I get a loan?

Yes, a single woman can get a loan. Many lenders also have special schemes for women offering them a discount up to 0.25%

• How instantly can I take a home loan?

Most lenders consider any property bought during the last 3 -6 months as a regular home loan application. You would be eligible for the same rates and income tax benefits as any other home loan. However, if you delay and the property purchase becomes more than 6 months old it will be treated as Loan against Property. The rates for the same are higher and there would be no tax benefits.

• Do professionals have special eligibility norms?

Most home loan lenders offer special privileges to self-employed professionals. Every Housing Finance Institution (HFI) has its own conditions regarding the type of professionals they would cater to. The HFI also decides on the qualifications required for such professionals to qualify for the relaxed norms for loan eligibility calculations.

• Can I get a home loan for an apartment that I want to purchase in New York?

No, currently no home loan lender provides loan for purchasing properties abroad.

• Can I take advantage of tax benefits from a home loan as well as claim House Rent Allowance (HRA)?

If you took a home loan and are still living in a rented place, you will be entitled to:

• Tax benefit on principal repayment under Section 80C
• Tax benefit on interest payment under Section 24
• HRA benefit

Of course, you can claim tax benefits on the home loan only if your home is ready to live in during that financial year. Once the construction on your home is complete, the HRA benefit stops. If you took a home loan, got possession of the house, have rented it out and stay in a rented accommodation, you will be entitled to all the three benefits mentioned above. However, in this case, the rent you receive would be considered as your taxable income.

• Can I get two home loans against two different properties?

Yes, you can have as many loans against different properties. The only criteria being that you should be able to repay all the EMIs every month.

• I have two housing loans on two different properties. Can I get tax rebate under sec 80 C of both the loans?

Yes, you can get the 80C benefit on both loans. However, the total amount that you will be entitled to will be a total of Rs 100,000 across both the homes.

• I have a home loan in which I am a co-applicant. However, the total EMI amount is paid by me. What is the total income tax exemption that I can avail?

The interest paid on a home loan is not directly deductible from your salary income for either of your flat loans. Income from house property will be calculated for each flat you own. If either of theses calculations shows a loss, this loss can be set off against your income from other heads. As for Section 24 deduction, on your self occupied house you can take advantage of interest payments up to Rs.1, 50,000. For the other property, you can claim actual interest repaid, there is no limit for the same.

• What is a “pre-approved property”?

Yes, you can claim income tax exemption if you are a co applicant in a housing loan as long as you are also the owner or co owner of the property in question. If you are only person repaying the loan, you can claim the entire tax benefit for yourself (provided you are an owner or co-owner). You should enter into a simple agreement with the other borrowers stating that you will be repaying the entire loan. If you are paying part of the EMI, you will get tax benefits in the proportion to your share in the loan.

• What are the tax benefits that I can avail of for repaying a home loan?

Many builders get their projects “pre-approved” by specific home loan lenders. The lender examines the legal documents of the title of that project, the stage of construction as well as the builder's track record to complete the project in time. It then declares all properties in the project to be “pre-approved”. You don’t have to go for legal and technical checks in case of a “pre-approved” property.

• Is there any loan provision for purchase of land?

You will be eligible to claim both the interest and principal components of your repayment during the year.

• Interest can be claimed as a deduction under Section 24. You can claim up to Rs. 150,000 or the actual interest repaid whichever is lower. (You can claim this interest only when you are in possession of the house)
• Principal can be claimed up to the maximum of Rs. 100,000 under Section 80C. This is subject to the maximum level of Rs 100,000 across all 80C investments.
• You will need to show the statement provided by the lender showing the repayment for the year as well as the interest & principal components of the same.
• What is Floor Space Index?

Yes, loan for land purchase is available as long as it is for residential purposes only.

• Many mortgage lenders like HDFC and State Bank of India offer this loan. You can get up to 85% of the purchase amount based on your credit profile and paying capacity.
• You get no tax breaks if you take a loan to buy a plot of land. But, if you take a loan for construction, that means a loan to build a house on that plot of land, then you can get a tax break.
• In such a case, the tax benefits are available on both portions of the loan the one to purchase the plot and the one taken to construct the house thereon.
• Please note that the benefits under Section 80C and Section 24 can be availed only when the construction of the house is complete.
• What is Pre EMI?

You've chosen a property that's yet under construction. So the lender makes the disbursement in parts based on the progress of the construction of your property. However till the housing loan is fully disbursed you have to pay simple interest at the rate you have agreed upon with the lender. This is known as the Pre EMI. And from the month following in which the full disbursement is made you will start paying your EMI.

• Is the EMI amount or the tenure of the loan affected if the value of the underlying property falls?

Fluctuating value of the property does not affect your EMI or your home loan liability. If you fail to repay your home loan you will be damaging your credit profile and any chances of getting a loan in the future. In such a case, where you want to dispose of the property because of loss in value – you will be much better off if you prepay your home loan and then sell the property.

• What are the charges other than interest that are charged by home loan lenders?

Almost all lenders charge certain administrative or processing fees apart from interest for providing a home loan in India. You must compare all these charges as well before signing on to a home loan contract.

• Technical or Valuation charges - payable to the lender or to his technical consultant.
• Legal fees - payable to the lender or to the legal consultants of the lender
• Prepayment Charges - This is the biggest charge that most consumers miss taking into account. A loan can be prepaid either in part or in full at any given point of time. You can also prepay a loan even when it is only partly disbursed. However, most banks have an upper limit on the number of times a person can prepay his loan in a year as well as on the minimum amount you can prepay each time. Until recently, banks charged a penalty for part or full prepayment. Increased competition has forced most banks to allow repayment without any charges if it is funded from own sources. In case the borrower, is transferring the loan to another lender he will need to pay the full charges.
• Stamp duty on creation of mortgage - some banks charge this fee whilst other banks normally just have a clause that requires this to be paid in the event the state government actually charges this amount. The escape route for non-payment of this duty are progressively being eliminated and the fact that the consumer carries the liability to pay this duty in the future if demanded by the state government along with interest and penalties in the future. So, this should not really be used by a consumer to eliminate a lender just because he is paying this stamp duty to the government.
• Is it necessary to get property insurance, while availing a home loan?

Most lenders do not insist on a property insurance when disbursing a loan. However, it is strongly advised to buy an insurance as your home would be one of your most valuable assets. The home insurance rates are very affordable especially when bought for a long duration say 10 years. It would cost close to Rs. 50 per lakh of property value per year.

• What is a floating rate home loan? When should one opt for a floating rate home loan?

A floating rate home loan is where the home loan interest rate charged by the lender keeps changing with respect to the rates in the market over the tenure of the loan. Typically, the rate charged is on the basis of their cost of funds and the prevailing market rates. These rates change periodically. Accordingly the tenure increases or decreases or alternatively the EMI increases or decreases based on whether the rates move upwards or downwards. Every home loan lender decides whether to change the rate of interest or change the tenure at the time of sanction. It is advisable to go in for the floating rate if you feel that the interest rates have reached its peak and can only go downwards.

• What is the difference between monthly rest & annual rest?

In a monthly rest, the interest is calculated on the outstanding principal at the beginning of every month. Once the interest is calculated at the rate applicable to you for the month it is deducted from the EMI received during the month.
Annual rest works on the same principle only the interest is calculated on your outstanding principal at the beginning of every year. It is also commonly known as “Yearly Reducing Balance”.
Monthly reducing balance is a better option all other things being equal as you get immediate credit for repayment and the interest component keeps reducing almost immediately on a monthly basis.

• Can I sell the property, even when the home loan is outstanding?

Yes, you can sell the property with the consent of the lender. This consent letter usually mentions the amount at which the home loan can be considered fully paid off. This amount is inclusive of prepayment charges as applicable and calculated at a future date to give you enough time to find a buyer. Based on this letter, you can negotiate with potential buyers. If the buyer, wants to take a loan to purchase the property the process is much simpler if he approaches the same lender. Then the lender does not need to release the title papers to another lender before getting the payment. If the buyer wants to make an outright payment- he can make the payment out to the bank directly based on the consent letter. And the balance amount is paid out to you. The property papers will be released only after the bank has recovered the entire amount including prepayment charges.

• Can I convert my loan from fixed rate loan to floating rate loan & vice versa?

Yes, you can convert floating rate home loan into a fixed rate one with no extra charges. However, to convert a fixed rate product to a variable rate product, most banks will charge a small fee. The swap can be done any number of times and at any point of time.



• Is it advisable to transfer a home loan from my existing provider?

Please be clear on why you wish to change your loan provider?

• Is it because you want a better interest rate and change in EMI?
• Is it because of service?
• Or, any other reason?

There is usually a prepayment penalty for the loan, so please understand that you will lose some money when you transfer out of your present lender. Additionally, the new lender might also charge you a loan processing fee. So, you might end up paying two types of fees during this transfer. Ask both the lenders what the fee will be. Make sure that you do the calculations of whether you will really save money with the transfer or not. The last thing you want to do is pay all these hidden charges. Also, practically speaking, you want to make sure that you are not going to add to your headache on the service levels.

• What is a fixed rate home loan? When should one opt for a fixed rate home loan?

Fixed rate home loan is where the interest rate on home loans charged by the lender is constant over the tenure of the loan. It is advisable to go in for a fixed rate only if you feel that the rate of interest prevailing in the market have touched rock bottom and the rates can only move upwards.

• What happens to processing/administrative fees if I don't avail of the disbursement?

Most lenders do not refund the fees that you pay to them if you cancel the loan after taking the offer letter from them. However, there are few Govt. owned banks which do offer full or partial refund.

• Can I increase or decrease the amount of the loan even after it has been sanctioned?

Yes, the change in amount can be done at any point before disbursement. Any increase in loan amount will however be subject to the eligibility conditions. The bank might also charge you excess fees on requesting an increase in the loan amount. The bank is not obliged to return excess fees paid in case you are requesting for a reduction in the loan amount.

• Can the Fixed Rate of Interest change during the loan repayment?

The Fixed Rate of Interest ideally remains fixed over the tenure of the loan. This rate does not change after the final disbursement has been made. It is ideally suited for situations where you expect the rates of interest to go up in the future and this fluctuation in the rates does not affect you adversely. In cases where the disbursement is spread out over a period of time and the rates might have changed in the interim. The rate of interest would remain fixed at the final weighted average rate at which the loan was disbursed. Nowadays, many lenders are reserving the option of changing the rate on a fixed rate home loan after 3 or 5 years. So please read the fine print before you sign up for a fixed rate home loan.

NRI

• Are any conditions required to be fulfilled if repatriation of sale proceeds is desired?

Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later.



• Can such property be sold without the permission of Reserve Bank?

Reserve Bank has granted general permission for sale of such property. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE/FCNR accounts.



• Can sale proceeds of such property if and when sold be remitted out of India?

In respect of residential properties purchased on or after 26th May 1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993 will have to be credited to the ordinary non-resident rupee account of the owner of the property.

How should the purchase consideration for the residential immovable property should be paid by foreign citizens of Indian origin under the general permission? The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with banks in India.

What are the formalities required by foreign citizens of Indian origin to purchase residential immovable property in India under the general permission? They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

Tax Benefits

• What are the benefits of taking a home loan for Section 88 of the Income Tax Act?

You get a 20% rebate on repayment of principal during a financial year. Once again, over the years, the principal repayment eligible for rebate has been enhanced from Rs 10,000 to the current limit of Rs 20,000. Stamp duty, registration fee or other such expenses paid for the purpose of transfer of such house property to the assessee is also considered under this amount.



• What are the benefits of taking a home loan for Section 24 of the Income Tax Act?

Interest paid on capital borrowed for the acquisition, construction, repair, renewal or reconstruction of property is entitled to a deduction. That means you are allowed to deduct an amount equivalent to the total interest payable on the housing loan from your taxable income within the same financial year.

This is now a substantial amount. It started off with the Income Tax Department offering Rs 15,000 as the maximum amount eligible for deduction in the case of self-occupied property. This later got doubled to Rs 30,000. It did not stop there. After getting enhanced to Rs 75,000, it was then taken to a limit of Rs 1 lakh. Presently, the limit stands elevated to Rs 1.5 lakh.

So, should you borrow money to acquire, construct, repair, renew or reconstruct property on or after April 1, 1999, you get a deduction of up to Rs 1.5 lakh. The criteria being: the property has to be acquired or constructed by March 31, 2003 and be self-occupied.