No PMAY interest subsidy if family member has house

By: | Published: May 21, 2018 2:21 AM

For availing the PMAY benefits, the household or beneficiary’s family should not own a pucca house anywhere in India.

cash, moneyThe buyer can opt
to borrow the home loan from the same FI as it will make the entire process easier and hassle free.

I am buying a property in the name of my wife as I have a flat in my name. Can she get benefits of Pradhan Mantri Awas Yojna (PMAY) as she does not have any house in her name?

– Akash Dubey

Your wife will not be able to avail of the PMAY interest subsidy on home loan as you already own a house. For availing the PMAY benefits, the household or beneficiary’s family should not own a pucca house anywhere in India.

If I repay my loan in full, will I get any other income tax benefits?

—Rajesh Shah

Home loan repayment is categorised into repayment of principal amount and the interest on the home loan. As per Income Tax Act 1961 rules, the current applicable tax exemption under Section 24(b) is `2 lakh for the interest amount paid in the financial year and up to Rs 1.5 lakh under Section 80C for the principal amount repaid in the same year.

I want to sell my property for which I am servicing a loan. Do I have to repay the full amount before selling it?

—Piyush Bhusal

You can sell the property with the consent of the financial institution (FI). In that case, the FI will hold the property papers with it until it receives the entire home loan amount. The buyer can opt
to borrow the home loan from the same FI as it will make the entire process easier and hassle free. If the buyer wants the property papers from the FI, he will
have to make an outright payment of the outstanding amount to the institution directly.

I wish to take a housing loan for construction on the land owned by my mother. She shall apply for the loan and I shall be co-borrower. The loan will be repaid by me. Will I get tax benefits on repayment of housing loan?

—G K Murli

Being a co-borrower makes the person eligible to claim tax benefits on the home loan amount. Each co-borrower can claim tax benefit on principal repayment under Section 80C of up to `1.5 lakh, but the combined claim cannot be more than the total principal repaid during the year. Interest payment qualifies for deduction under Section 24(B), which has an overall limit of `2 lakh. Again, all co-borrowers can claim tax deduction for the same from their respective incomes, but the total claim cannot exceed the actual interest paid.

The writer is JMD & CEO, DHFL. Send your queries to
fepersonalfinance@expressindia.com

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