Your Queries: Do not take home loan just to save income tax

By Chaitali Dutta

My father wants to construct a house on land registered in his name only. Can I apply for a home loan and to claim income tax exemption?
—M Kiran Kumar
A home loan is not possible if you are not an owner or co-owner. Taking a home loan just to get income tax benefit may not be a good idea. Yes, if you do not have the funds, then you need the loan. The income tax benefit helps in reducing cost of the funding and part of the interest burden is knocked off by the tax saving. Do the math before taking on a liability.

I took a Rs 23 lakh home loan from Indiabulls Housing Finance in 2018. After three months, inter-est rate was raised by 2%. Now when most banks are reducing interest rates, Indiabulls is charging same amount. I also applied for PMAY but it has not updated on this. What should I do?
—Sudha Singh
Explore other loan providers and move to a lower interest rate which is linked to repo rate. That will be a transparent way to reflect the current rate of interest. You may then apply for PMAY when your new loan is sanctioned.

I have doubts about the way home loan interest is calculated. I took a loan of Rs 30 lakh from HDFC and have paid for 14 years. Starting rate was 8.5% which went up to 13% and has now come down to 8.7%. In between, I paid four times extra money to bring the interest down and have made a part payment of `8 lakh. Should I file an RTI to seek how the EMI is charged?
—Ashok Kumar
You can ask for the full statement from HDFC. I doubt there will be intent-ional overcharging of interest as calcula-tions are system-based and not applied physically. If you have the record of all the payments made as well as the interest rate change history, then the calculations can be recreated to see if the current balance matches. In a typical home loan of 20 years, amount you repay is double the amount of loan, as a ballpark.

Indiabulls has stopped disburse-ments. How can I do balance transfer for my construction-linked loan?
—Akash Shetty
This will be like any other balance transfer process. Approach the new bank/ FI with loan details and income proof. Get the new loan sanctioned. Once all paperwork is in place, the first disbursal will be to Indiabulls to close its loan

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