Things To Know Before Buying New Property

August, 2018

There is a bit of work that a buyer would need to take when they buy a house property and this relates to the process of paying taxes. While capital gains tax is present at the time of the sale of the property and this is a calculation that would be influenced by the cost price that is paid at the current juncture there is also another provision of tax deducted at source that will come into the picture. Many people do not have an idea of this provision because they do not regularly buy and sell property and hence this is something that needs to be taken into consideration. Here is a closer look at the applicable conditions that need to be followed.

Reporting

The whole purpose of introducing the element of tax deducted at source in a property transaction is that a lot of them actually escape the attention of the tax authorities. Many of these are carried out in cash and there is often no permanent account number that is present when the deal is registered. This actually leads to the transaction slipping through the tax net and hence to avoid this the tax department has come up with the proposal of the deduction and this becomes an important thing to follow.

Basic conditions

The basic condition that is applicable for the property transactions is that if this has taken place after June 1, 2013 then there would have to be a tax deducted on source if the consideration of the property exceeds Rs 50 lakh. This is meant to ensure that smaller properties remain out of the tax net and that larger sales are recorded and there is no tax avoidance especially when it comes to under reporting too. Once the details of the property are present then the tax department can ensure that they take a closer look at the entire deal and the valuation so that if there is a problem then this can be tackled.

Buyer

The TDS has to be undertaken by the buyer of the property and not the seller so it becomes the responsibility of the buyer to ensure that they complete the process when the transaction is being completed. There is another condition that they will have to fulfil which is that once the tax is deducted from the seller then the amount has to be deposited with the government. This is important to complete the transaction and hence this is required as per the procedures. There could have been a problem for the buyer since they do not have a tax deducted at source number but there is an exemption that is given for such purchases because these are one time purchases and hence in such cases the tax can be deposited after the usage of the PAN is done. This saves a lot of trouble because the individual does not need to go and take a TAN just for the purpose of a single transaction.

Details

There are several other details that are important in the whole process. The first is that the TDS has to be deposited with the government within a period of seven days from the end of the month in which the TDS has been deducted. This gives some time to the buyer to ensure that they complete this part of the transaction. One can make the payment online too but one needs to be careful to ensure that there is a proper way in which the details related to the transaction are entered. There is also the facility of making the payment online when the details are filed and in the end the buyer has to give the TDS certificate to the seller of the property and this can be downloaded from the income tax website.

Also read: HOME FINANCING OPTIONS FOR NRI BUYERS

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Source: moneycontrol.com

Décor Tips For A Peaceful And Calming Home

August, 2018

In today’s frenetic world, it is important to create a calm and peaceful home, to recharge and begin a new day, refreshed. Every personal space has a calming vibe and every home reflects the personality of the people living in it, says Sameer AM, founder and CEO of Bonito Designs. “Sometimes, one just needs to give it a few additional touches, in order to bring out the best,” Sameer adds.

Organise and de-clutter

Clutter produces physical chaos and is an unwelcome visual distraction. “When one’s eye can skim smoothly across clean, clear surfaces throughout one’s home, it becomes easier to stay focused on the present and avoid stress. Clean, clear floors and surfaces, streamline one’s life. Hence, home owners should make storage for items, so that they can either be organised better or hidden away. For example, tangled cables and cords can be an eyesore. Have one area, where the chargers can be stored out of sight, when not in use and if cables and wires cannot be concealed permanently, find a way to disentangle and organise various cables neatly and hide them behind the appliances,” suggests Sameer.

Home lighting

Light not only helps in illumination but also aids relaxation and creates the right ambiance. Using natural light, is an easy way to create a peaceful home. “Mood lights can work wonders, in creating a calming atmosphere. It sets the right mood, leaving one cheerful and relaxed. Opt for blue, amber or even off-white colour lights, as these can improve sleeping patterns. It is best to position the lights facing downwards, to ensure that the light does not hit the eyes directly. A slight tilt will also work, as the glare will not fall on your eye directly,” states Tuhin Roy, founder, Jumping Goose.

Dedicated recreation space

Dedicate one space for yoga or meditation, exercising, painting or anything else that relieves stress. “Create a reading nook in your balcony and add a cane swing or a low seating, with lots of throw cushions that are bright,” adds Roy. The colours used in the house should be soothing for the mind and soul. Avoid excessive use of black and grey colours at home. Bedrooms can be done up in soothing colours such as pink, peach, light yellow, green and other light colours. These colours create tranquil vibes and invite healing energy. “Go for pastel shades or plain white. Lighter hues work well, in creating a calming ambience and help in de-stressing the mood in one’s home. One can also opt for sea-green, to depict the tranquility of the sea,” states Roy.

Curb the noise

To reduce traffic noise, soundproof the walls and ceilings, by doubling up on drywalls and caulking the gaps from where sound enters. Soundproofing can be done, by adding insulation and sound-dampening fillers, such as perforated gypsum boards and glass wool between partition walls or in false ceilings. Carpets, drapes and other soft materials, also help to absorb sound. “For walls, a cheap, sound-muffling solution is 4×8-ft fibre-boards, a recycled cardboard material that is available at reasonable prices. Moreover, these can be painted, to add colour,” says Sameer.

Music can have a substantial impact on your mind. “Some people experience a calming effect by listening to classical music. For others, familiar tunes from their past, can make them feel happier and more at peace. A room with good acoustics that allows the music to reverberate, while also cutting out unnecessary background sounds, can create a calming space in your own home,”

Create a natural environment

Bring natural elements like plants into the house, which help to clean and oxygenate the indoor air, making it easier for you to breathe. Arrange some fresh flowers in pots, to make the home more cheerful. Indoor water fountains can also lend peace and calm to the interiors. The sound of trickling water has a tranquil effect and connects us to nature. Other natural materials, like fabrics, furniture, etc., can also affect one’s mood. Add natural materials like rough jute, linen, old leather, pure silk and raw wood in the home.

Tips, to create a soothing ambience at home

• Create a purifying, rejuvenating atmosphere in your home, by choosing natural scents like those from beeswax candles, essential oils and fresh flowers.


• Opt for candles and tea lights, to provide a soft, warm glow that can help you to unwind.


• The bathroom can have a shower curtain with soothing colours or prints. Avoid clutter on the counters in the bathrooms and instead, opt for closed storage. Scented candles, incense sticks or diffusers, can also be placed to create a tranquil atmosphere.


• Add chimes to the entrance or balcony areas, for a soft, tingling sound.


• Display pictures, posters or souvenirs and knick-knacks from trips that remind you of good times.


• Put up positive quotes around the house, to help you stay focused on your life.

Also read: HOME FINANCING OPTIONS FOR NRI BUYERS

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To know More about Home Loan on 1 BHK flats in Ghodbunder Road Thane, Contact JVM Spaces - Real Estate Developer in Thane 

Source: housing.com

TMC plans transparent glass walkway from MH School to Jambli to beautify Masunda

Thane : The Masunda lake precincts is set for a complete revamp with a transparent glass walkway to replace the age-old paver block path that circles around this 'Jewel of Thane'. The civic administration and the public space designers are believed to be working on a plan which will not give a 'modern look' to the city's landmark but will also widen the road and decongest the bustling street.

The initial discussion on the renovation plans was aimed to upgrade the waterfront by demolishing a part of the existing 4.5m-wide walkway by 1.5m adjoining the lake for over 300 mts.

"The new walkway will be 1.5 m wide over the Masunda lake bank and will have a 1m steel barricade alongside. The entire 300m stretch of the walkway from Ajramarji junction to Jambli naka will have a transparent floor made of toughened glass for pedestrians to get a feel of walking over water, informed officials," a senior civic bureaucrat told TOI.

He added that the Masunda lake is one of the most vibrant public space here and in spite of the traffic chaos and the vehicular pollution, the citizens of all ages prefer to spend quality time with their friends and dear ones.

"It will be a totally modern pathway with a glass flooring and strategically placed LED lights to give it a very classy look," he said, adding that the adjoining motorway will be widened to create more space for easy movement of vehicles.

The walkway would be illuminated with LED lights at night. The civic official said the project was approved by the general body of the municipal corporation in 2017 as part of lake beautification and the process of floating tenders will take off soon.

He said the initial estimate is that the beautification project would cost around Rs 7 crores and the turnaround time will be around eight months.

Meanwhile, environment experts have reacted sharply on this plans and claimed that this infringement could disturb the marine life.

"Why is the administration bent on disturbing the sanctity of the lake premises in the city? The presence of pedestrians above the water surface will disturb the marine life inside the lake and illuminating it at night will further hamper their existence. The corporation should think of some other options than just adding on to the concrete jungle," said an environment activist.

The civic officials, however, dismissed any damage to the ecosystem in the lake as the structure would be cantilever and no physical infringement with the lake will be allowed. "We are ensuring the lake premises will not be touched or the marine life inside will not be affected. We have floated tenders for the same. Trees on this stretch will not be affected," assured a civic official.

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Source : timesofindia.indiatimes.com

'Property is Never Second-hand; it's Somebody's First Home'

"Automobiles, electronics, clothes, etc, all become 'second-hand' after being sold by the first owner, but a house is never second-hand. It will still be somebody's first home," believes 66-yearold retired banker Arun Sharma. The fact that his 1-BHK flat has appreciated to about Rs 1.2 crore within nine years is a matter of joy and pride for Arun and Alka Sharma. "I have lived in NABARD quarters throughout my career and never felt the need to own a home in the city. However, with just two years left for retirement, I booked this one in Thane for Rs 36 lakh, only because my wife wanted one," says Arun.

Financing our dream home

Gathering their family savings and maturity amounts from mutual funds invested over several years, the Sharmas were finally able to secure their dream home. Arun explains, "I initially took a home loan of Rs 12 lakh but was able to close it soon after retirement using some of my PF and gratuity amounts. Thus, I retired with no liabilities but only assets in hand."

Upward mobility

When the Sharmas took possession in 2013, there were hardly any shops around and even the roads were not completely done. "Today, there are about 25 retail outlets in the vicinity with another two-three more projects launched recently. Thane has bloomed in a very short span of time as a relatively affordable destination in Mumbai. I would encourage all Mumbaikars, especially the younger generation, to think seriously about a home for their family," advises Alka Sharma.

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Source: content.magicbricks.com

Home loan versus loan against property: Crucial differences

August, 2018

When it comes to raising money, should a borrower opt for a loan against property or a home loan? We examine…

Purpose

A home loan is taken for the purpose of either buying a ready-to-move-in house or for the purpose of booking an under-construction property. Home loans are available for residential, as well as commercial properties. On the other hand, a loan against property is generally taken, for the purpose of raising additional funds for business. The loan against property may be obtained in two forms. It can be a pure loan, under which, a lump sum is paid to the borrower, against the security of an immovable property. Alternatively, a line of credit may be set up in the form of an overdraft facility with a set limit, based on the value of the property and repayment capacity of the borrower.

Loans against property may also be obtained for personal purposes like education or marriage in the family. A loan against property can also be availed, to finance the purchase of another property, in case it is not possible to get a home loan against the property, due to any technical reasons like defect in the title of the property being purchased. The security pledged, for taking a loan against property, may be a residential or commercial property. In case of a home loan, the property to be purchased is pledged with the lender, whereas in case of a loan against property, another property is pledged and not the house that is being purchased.

Credits : freepik.com

Tax benefits of home loans and loan against property

For home loans taken to buy a residential house property, the borrower can claim twin tax benefits under the income tax laws. The first benefits is for the repayment of the principal component of the home loan, which is available under Section 80 C, upto Rs 1.50 lakhs for all the residential properties taken together. This deduction of Rs 1.50 lakhs is available along with other eligible items like public provident fund, contribution towards employee provident fund, life insurance premium, school fee for children, national savings certificates, ULIP, ELSS, etc. The other benefit is available under Section 24(b), for the interest paid on such loans. This benefit can be availed even for commercial properties and also on amounts borrowed from friends and relatives.

TFor a loan against property, the availability of tax benefits will depend on the ultimate use of the money borrowed. If the money is used for the purpose of your business, the interest paid and the incidental costs, like processing fee and documentation charges, can be claimed as business expenditure under Section 37(1) of the Income Tax Act. If the loan is used for personal purposes like marriage or education of your child, the interest on the same cannot be claimed under the present tax laws. If the money is used for the purpose of financing another house property, then, the same can be claimed under Section 24(b) of the Income Tax Act. The interest claim would be allowed, only if you are conclusively able to establish the link between the money borrowed and its ultimate use.

However, you cannot claim any benefit for the principal repayment on a loan against property that is taken to finance another house, as the money borrowed cannot be treated as a home loan.

Margin requirements and rate of interest for home loans and loan against property

To safeguard themselves against a decline in the market value of the asset, lenders do not lend the full value of the security/underlying asset. This difference that the lender retains while lending, is called the margin. The margin money in the case of a home loan, is the money that the borrower is supposed to finance on his own. The margin requirement for home loans is generally regulated by the Reserve Bank of India, in the case of banks and by the National Housing Bank, in the case of housing finance companies. The margin money also depends on the amount of home loan availed. The maximum loan that a lender gives, is only upto 90 per cent of the value of the property. So, the buyer has to put in 10 per cent. For high-ticket home loans, the margin requirement can increase to 25 per cent. For loan against property, which is not covered under priority sector lending, the lenders have to keep a higher margin, which can range from 24-40 per cent of the property.

The rate of interest on home loans is generally in the range of 9-12 per cent, depending on the type of lender and the profile of the borrower. The rate of interest on loan against property, is generally higher than home loans but lower than personal loans. The rates may vary from 11-14 per cent, again depending on the type of lender and profile of the borrower.

Hence, a home loan is the best option, for persons who want to buy a readymade house or book an under-construction property. However, in case you have any title defect in the property to be purchased, you can finance the same by way of a loan against your existing property. 

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Source: housing.com

Home financing options for NRI buyers

Besides regulations for the type of properties that NRIs can purchase in India, legal provisions also exist on the mode through which these purchases can be financed

When a non-resident Indian (NRI) opts to purchase a property in India, there are several regulations that govern how such a purchase can be financed.

Sources, for financing a real estate investment in India

The money for purchasing a property in India, has to come through banking channels only. Consequently, the payment cannot be tendered in the form of traveller’s cheque or foreign currency. An NRI can also use the money in his/her credit, in non-resident external (NRE) rupee or non-resident ordinary (NRO) or foreign currency non-resident (FCNR) account, maintained in India.

NRIs are allowed to purchase property in India, by availing home loans in Indian rupees, from banks or housing finance companies. The home loan can also be granted by the Indian employer of the NRI employee, for the purpose of financing of the property.

Credits : freepik.com

Obtaining a home loan

As NRI investment in Indian real estate is only allowed in residential or commercial properties, banks too, can finance only these properties. Almost all banks offer home loans to NRIs for buying a house or constructing one. One can also get a loan, for purchase of land (non-agricultural), for constructing a house in India.

The application for the home loan can be made online, as well as offline. The nature of documents that need to be submitted, will depend on whether the NRI is a salaried employee or whether s/he is self-employed. It will also vary, depending on the NRI’s country of residence. Nevertheless, copies of one’s passport and visa, passport-sized photographs and proof of residence in the foreign county, will be required in all cases.

Depending on whether the NRI is salaried or self-employed, s/he also has to fulfil a minimum period of stay in the country of present residence, to avail of the home loan. Banks may also insist on an acceptable co-applicant, or an NRI guarantor. The NRI guarantor too, has to submit documents pertaining to identity proof, address proof and income proof.

Servicing the home loan

EMIs on the home loan can be paid through remittances from outside India, through a proper banking channel, or by debiting the NRE, or NRO, or FCNR account. In case the property is let-out, the rental yields can be used for servicing the NRI home loan. Money transferred to the NRO account from close relatives, can also be used for servicing the home loans. In case the property is purchased for self-occupancy, the NRI can avail of a loan against the FCNR or NRE account deposits, of up to Rs 1 crore, for servicing the home loan.

Remittances out of India

An NRI is allowed to repatriate some of the funds, in case the property so acquired is sold. However, the number of properties (whether purchased or inherited), for which s/he can remit or send money to India, is restricted to two. Moreover, the amount that can be repatriated, cannot exceed the amount (denominated in foreign currency) received as remittances from outside India, either for purchase or servicing of the NRI home loan. Under normal circumstances, an NRI is allowed to remit an amount of USD 1 million in a year, out of India, from his NRE, NRO, or FCNR accounts, which includes the amount remitted for sale of a house.

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Source: housing.com

These are the factors that decide whether you get a home loan or not

While deciding on a home loan application, the lender is primarily interested in ascertaining whether the applicant can service the loan each month

There are various factors that determine whether you will get a home loan or not. Consequently, it is advisable to know your home loan eligibility in advance, so that you can plan the purchase of your budget property in thane, accordingly.

Your credit score/report

The most common reason for the rejection of a home loan application, is a bad credit score. As a first step towards processing any credit facility, lenders will obtain your credit score and credit report from any credit information bureau, like CIBIL. If you have defaulted in the repayment of your credit card bill or any other loan, the default is reported by the lender to such credit information bureaus.

Your credit score may also be adversely affected, if you have made a settlement with the lender vis-à-vis an outstanding loan amount. A similar situation may arise, in the case of dues on a credit card, where the lender has accumulated interest on the initial outstanding amount and subsequently agrees to reduce or remove the interest component included in the total outstanding, as a settlement deal to recover the amount due.

In such cases, the lender writes-off such unrecovered amount in its books and reports the same. The nomenclature ‘write-off’ has a negative connotation and this may discourage the new lender from sanctioning your loan.

Not all the cases, where the lender agrees to forego any amount due to it, are treated as write-offs though. In cases of genuine mistakes on the part of the lender, the outstanding amount is waived and the lender is supposed to report such remissions as waivers and not as write-offs.

In case the lender has reported a waiver as a write-off, you need to ensure that the lender rectifies such errors. For example, this may happen if a credit card, with fees applicable on it, was sent to you even though you may not have applied for it. In such situations, the credit card issuing company has to forgo the amount, if the person to whom such a card is issued, refuses to pay. In most cases, the lender will report remissions of such small amounts as write-offs. Although the amounts involved may be small, the prospective lender may reject your home loan application.

Credits : freepik.com

Your age

Lenders generally do not grant home loans, to salaried individuals who have retired and to self-employed people who have completed 65 years of age, even if adequate security is provided, in the form of other affordable property. The reason for this, is that the lender is interested in getting his home loan serviced each month and is not so interested in the value of the property that is mortgaged. So, unless you have a sufficient and regular flow of income, you will not be able to get a home loan.

Earning history

Lenders generally, are not willing to give home loans to people who have not completed a certain minimum number of years in employment or in business. Lenders do so, to satisfy themselves about the consistency and quantum of the applicant’s income flow. However, a prior earning history is not a strict requirement. Lenders do consider the home loan application of professionally qualified persons favourably, even if they do not have much of an earning history. The same applies to people employed in permanent posts in government departments.

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Source: housing.com

Advantage of Taking a Joint Home Loan

There are multiple benefits in terms of sharing the debt-burden and enhancing eligibility level

 

The home loan amount and interest rate on the loan for an individual depends on various factors like eligibility, tenure, availability of money in the market (liquidity), inflation and monetary policies. This makes it imperative for the borrower to be careful while opting for a home loan so as to ensure that the home loan does not turn out to be too expensive over the duration of the loan. In this context, the option of a joint home loan is worth considering as it will not only help the borrower in sharing his debtburden but will enhance his eligibility to get a higher loan as the income of the coborrower will be considered.

Options

Usually lending institutions give an option to take a joint home loan with as many as six coapplicants this includes his/ her spouse as well as blood relatives like parents and siblings. A joint home loan however is not usually permitted to friends, sisters or unmarried partners living together though they could be the coowner of the property. Some banks and financial institutions also allow brothers to take a joint home loan provided both of them are coowners of the property. Spouses are however exempted from the property coownership clause and the term of their loan can be a maximum of 20 years, subject to the retirement age of the older applicant. In case the loan is availed by a parent and a child the maximum term is 10 years and if the parent's income is considered for repayment, then the maximum term may be restricted to the retirement age of the parent.

Documentation

The documentation process for joint home loans is similar to that of individual home loans. Coapplicants are required to submit know-your-client (KYC) details such as identity and address proof, income proof and proof of coownership of the property.

Taxation

From an income tax perspective, the provisions for tax benefits remain the same for both individual and joint home loans. However, the total benefits avail-able in absolute terms are higher in a joint loan as compared to an individual loan. In case of a joint home loan, both or all coborrowers (provided they are coowners except in case of spouse) can claim tax deductions under Section 24(b) of the Income Tax Act against interest repaid and under Section 80C against principal amount repaid depending on their ownership share. This is besides the option to split costs of registration and stamp duty between co-borrowers to claim tax benefits under Sec-tion 80C.

An individual can avail the tax benefit on a home loan up to Rs 1.5 lakh under Section 80C and 2 lakh under Section 24(b). But if he has availed a joint home loan in the ratio of 50: 50, then both the coborrowers can claim these benefits separately. This takes the combined limit to Its 3 latch under Section 80C and 4 lakh under Section 24(b) there by reducing the overall cost of loan for the family. The total tax deduction that could be available by a married couple taking a joint home loan is Its 7 lakh, which is extremely beneficial. This is double compared to an individual home loan, although this provision may vary from person to person. It is therefore advisable to mutually work out the ownership share between the coborrowers to optimize the tax benefits. This can be in the ratio of 50:50 for claiming deductions in equal proportion or in the ratio of 60:90 where the coborrower in the higher tax bracket owns a bigger share.

Repayment

The repayment process for a joint home loan is simple and convenient. Payment can be made from a single or joint account by way of cheques or ECS. Coborrowers also have the option to share the number of EMIs between them, they could decide the number of cheques to be issued by one borrower and the balance could be made by the other. Another convenient mode is that the payment of all the instalments is made by one borrower followed by a refund of his share from the other borrower. For better loan eligibility, joint home loans are becoming a practical option for borrowers today especially when the coapplicant can contribute to the loan with their salary as well.

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Source : epaper2.dnaindia.com
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