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Types of Home Loans

A person seeking investments for house or a property opts for Home Loans for a variety
of purposes ranging from construction to renovation. The Error: Reference source not
found (HFCs) now offer individuals with various alternatives to choose from while
buying a home loan. And the availability of Error: Reference source not found offered is
as varied as their requirements.
1. Home Purchase Loans
2. Home Construction Loans
3. Home Improvement Loans
4. Home Extension Loans
5. Home Conversion Loans
6. Land Purchase Loans
7. Stamp Duty Loans
8. Bridge Loans
9. Balance Transfer Loans
10. Refinance Loans
11. Loans to NRIs
Home Purchase Loans:
This is the basic Error: Reference source not found for the purchase of a new home.
Home Construction Loans:
This loan is available for the construction of a new home on a said property. The
documents that are required in such a case are slightly different from the ones you submit
for a normal Error: Reference source not found. If you have purchased this plot within a
period of one year before you started construction of your house, most HFCs will include
the land cost as a component, to value the total cost of the property. In cases where the
period from the date of purchase of land to the date of application has exceeded a year,
the land cost will not be included in the total cost of property while calculating eligibility.
Home Improvement Loans:
These loans are given for implementing repair works and renovations in a home that has
already been purchased, for external works like structural repairs, waterproofing or
internal work like tiling and flooring, plumbing, electrical work, painting, etc. One can
avail of such a loan facility of a home improvement loan, after obtaining the requisite
approvals from the relevant building authority.
Home Extension Loans:
An extension loan is one which helps you to meet the expenses of any alteration to the
existing building like extension/ modification of an existing home; for example addition
of an extra room etc. One can avail of such a loan facility of a Error: Reference source
not found, after obtaining the requisite approvals from the relevant municipal corporation.
Home Conversion Loans:
This is available for those who have financed the present home with a home loan and

wish to purchase and move to another home for which some extra funds are required.
Through a home conversion loan, the existing loan is transferred to the new home
including the extra amount required, eliminating the need for pre-payment of the previous
loan.
Land Purchase Loans:
This loan is available for purchase of land for both home construction or investment
purposes
Stamp Duty Loans:
This loan is sanctioned to pay the stamp duty amount that needs to be paid on the
purchase of property.
Bridge Loans:
Bridge Loans are designed for people who wish to sell the existing home and purchase
another. The bridge loan helps finance the new home, until a buyer is found for the old
home.
Balance-Transfer Loans:
Balance Transfer is the transfer of the balance of an existing home loan that you availed
at a higher rate of interest (ROI) to either the same HFC or another HFC at the current
ROI a lower rate of interest.
Re-finance Loans:
Refinance loans are taken in case when a loan for your house from a HFI at a particular
ROI you have taken drops over the years and you stand to lose. In such cases you may
opt to swap your loan. This could be done from either the same HFI or another HFI at the
current rates of interest, which is lower.
NRI Home Loans:
This is tailored for the requirements of Error: Reference source not found who wish to
build or buy a home or property in India. The HFCs offer attractive housing finance plans
forError: Reference source not found with suitable repayment options.
Evaluation and verification of home loan applicant
After applying successfully for the home loan and submitting the processing fees, the
bank evaluates your application, decides in principal about your home loan and requires a
personal meeting with the bank officials. This decision for personal interaction can be
taken within 2-3 days of submitting a complete application. The purpose of this personal
interaction is to know more about the borrower and his repayment capacity.
Satisfied by your application and personal interaction, the bank proceeds to verify all the
facts that you mentioned in your application for home loan. A field investigation process
is initiated - to confirm and validate everything stated in the application form. Qualified
representatives are sent by the bank to your office and place of residence to ascertain the
facts. The references provided in the application are cross checked and verified.
Verification of repayment capacity
Once the field investigations over, the bank now goes ahead to verify your repayment
capacity. This is the most vital part of any home loan process. If the bank finds that you'll
not be able to repay the money back with interest on time, it will simply deny you any
home loan offer. On the other hand if the bank finds that all's well and is convinced by
your repayment capacity, it sanctions your home loan. Based on how well the bank is
satisfied by your financial conditions and repayment capacity the bank can issue a
conditional sanction or unconditional sanction. If the sanction is conditional, you'll have
to fulfill the conditions imposed before the loan is disbursed.
Offer letter for home loan
The bank then prepares an offer letter which contains the following detail:
 The amount of home loan sanctioned
 The interest rate applicable on your home loan
 Whether the interest rate is fixed or floating
 Your home loan tenure
 The mode of repayment of the home loan
 If any special scheme applies to the home loan, its details
 The terms and conditions associated with the home loan
If you find the offer attractive and agree with all the facts mentioned in the offer letter,
you will have to provide an acceptance copy to the bank. This is generally a duplicate of
the offer letter signed by you, provided to the bank for its records. If the bank charges any
Administrative fee, it will have to be submitted at this stage.
Tax Saving & Benefits of Home Loan in
India
Certainly “Saving Tax” on your income is always a spot of interest for each one of us and
why not save on it when there is a legal way? Home Loans are one of a better ways for
saving on your taxes for a longer duration. So how it exactly works?
There are different sections of the “Income Tax Act” of India under which you can avail
deductions on the taxes, confers you to save a signification amount on your total tax
liability.
There are two sections of the “Income Tax Act” of India which will allow you to get a
deduction if you have taken a home loan; this of course ignores home loans from “private
sources” (Friend, Family, etc). The two sections are here under.
Sec 24(b) of the Income Tax Act, 1961
Sec 80(c) of the Income Tax Act, 1961
Section 24(b) is with respect to the “Interest Paid” on the Home Loan and Section 80(c) is
with respect to the “Principal Repayment” of the Home Loan.
The Section 24(b) of the Income Tax Act, 1961 is applicable on Home loan for purchase
of house or construction of the house property. You can avail a deduction of up to Rs.
1,50,000 of you total tax liability, Also reconstruction or renewal or repairs is eligible for
deductions under the said section.
The Section 80(c) of the Income Tax Act, 1961 allows you a deduction of up to Rs.
1,00,000 on the principal repayment amount.
Illustration
Suppose your total taxable income is Rs. 4,00,000.
Principal repayment is Rs. 1,50,000 and total Interest Payable is Rs. 1,80,000.
The total deduction allowed is Rs. 2,50,000 (1+1.5Lacs) under the sections. Hence now
your total taxable income becomes only Rs. 1,50,000 (4-2.5Lacs) and that saves a lot of
money!
Housing Loan India
To own a house is the dream of almost every individual. In India, demand for home is
more but not every one is financially strong to own the house. Here comes the concept of
home loans given by various banks, financial institutions, housing financing companies
like HDFC, State Bank of India, ICICI, Citi Bank, etc.
Housing loans are generally secured loans as the loan amount is huge. Thus the borrower
has to offer guarantee against the loan applied for to the lender. Housing finance
companies sanction 80-85 percent of the cost of the house. The loan amount is to be
repaid in equal monthly installments.
Different lenders offer different rates of interest. Hence the borrower must be aware of
the interest rates prevailing in the market. Proper market research must be done so that
you can avail the loan at the best rate of interest. Online information of various
companies providing loan is available along with interest rates. Application forms can be
filled online which saves time of the borrower and also makes the task hassle free.
In India, both fixed interest rate and floating interest rates are offered to the borrower.
Fixed Interest Rate: It is the rate of interest which is fixed on the loan amount for the life
of the loan and it does not vary with fluctuations in the market. Interest rate may vary due
to policy change by RBI, market conditions etc.
Floating Interest Rate: It the rate that fluctuates with the fluctuation in the market interest
rate. The interest rate may increase or decrease depending on the situation in the market.
Keeping the circumstances in mind, borrower must opt for the best suitable type of
interest rate. Apart from interest there are other charges like processing fee,
administrative fee, etc. on the loan amount sanctioned and the charges vary from lender to
lender. The companies providing loan check the creditability of the borrower before
sanctioning the loan.
For repayment of home loans, there are many options available for the borrower to suit
their personal requirements.
Equal Monthly Installment (EMI)
Variably Monthly Installment
EMI is the fixed monthly installment to be paid by the borrower. It is a preferred choice
of borrower as he is aware of the monthly payment to be made. Variable monthly
installment is the flexible payment method.
Prepayment of Housing Loan: In order to repay the loan faster additional payment is
made apart from monthly installments. But it is not accepted by all the institutions and
they may charge a penalty of 1% to 1.5% of the additional amount repaid. Some
institutions allow prepayment and to some we have to give 1-3 months notice before
making prepayment.

Executive summary

This document provides guidance to banks and banking supervisors on recognition and
measurement of loans, establishment of loan loss allowances, credit risk disclosure and
related matters. It sets out banking supervisors' views on sound loan accounting and
disclosure practices for banks. The document also serves as a basic framework for
supervisory evaluation of banks' policies and practices in these areas. It may also be
helpful to accounting standard-setters.
Various international bodies, including the Basel Committee, have called for progress in
accounting and disclosure practices for banks' lending business and related credit risk.
Accounting treatments generally, and loan accounting treatments specifically, can
significantly affect the accuracy of financial and supervisory reporting and related capital
calculations. Moreover, sound accounting and disclosure practices are essential to ensure
the enhanced transparency needed to facilitate the effective supervision and market
discipline of financial institutions. In addition to the Basel Committee, the G7 Finance
Ministers, G10 central bank Governors and international financial institutions such as the
International Monetary Fund and the World Bank have called for progress in this area.
The paper begins by stating the overall objectives of the Basel Committee in addressing
the topic of sound practices for loan accounting and disclosure. It summarises key terms
and ties this guidance to the credit risk management process. The paper then provides
guidance on sound practices with respect to key loan accounting issues, such as the initial
recognition and measurement of loans, subsequent measurement of impaired loans, the
establishment of loan loss allowances, and income recognition. Moreover, the paper
presents sound disclosure practices focusing on the credit risk in the loan portfolio. The
paper also includes a brief discussion of the role of supervisors in assessing a bank's
management of asset quality and the adequacy of loan loss allowances.
Four primary concerns of supervisors regarding loan accounting and disclosure are a) the
adequacy of an institution's process for determining allowances, b) the adequacy of the
total allowance, c) the timely recognition of identified losses through either specific
allowances or charge-offs and d) timely and accurate credit risk disclosures.
The publication of this paper is a component of the Committee's long-standing work to
promote effective banking supervision and safe and sound banking systems. It
complements the Basel Core Principles in the field of accounting and disclosure for
banks' lending business and related credit risk. International implementation of the
guidelines in this paper should help achieve enhanced bank accounting policies and
practices, which are consistent with sound risk management practices, in both G10 and
non-G10 countries, as well as increased convergence of such policies and practices across
banks and countries.

Home Loan: Process: Overview


There are several steps in the home loan process. Here are the steps in brief:
1. Application form
2. Personal Discussion - Error: Reference source not found, Error: Reference source not
found, Error: Reference source not found
3. Bank's Field Investigation
4. Credit appraisal by the bank and loan sanction
5. Offer Letter
6. Submission of legal documents & legal check
7. Technical / Valuation check
8. Valuation
9. Registration of property documents
10. Signing of agreements and submitting post-dated cheques
11. Disbursement

Home Loan: Process: Basics


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tips on how to choose property to invest ......
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Can one sell his/her property taken on loan when it is still outstanding against
it? ......
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increase or decrease the loan amount sanctioned ......
Eligibility Criteria
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Process
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Error: Reference source not foundBest Interest Rates
Error: Reference source not foundAs on 6 Aug, 2010

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Hidden Costs
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Public Sector
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Housing Finance Companies provide Home Loans as well as Error: Reference
Home Insurance in India. ▪
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1 Bob Housing Finance Ltd. Error: Reference
Purpose ▪
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For purchase of land /site from Govt./statutory bodies
such as housing boards, Development Error: Reference

Authorities/CIDCO etc. Error: Reference source not source not found
found
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1 Canfin Home Loans ▪
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Private Institutions
After having seen over a lakh satisfied customers
secure their own homes, Can Fin Homes now looks Error: Reference
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spent over a decade in the home finance business, we
are well placed to understand the significance and ▪ Error: Reference
importance of your need to own a home. Error: source not found
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2 IND BANK HOUSING LTD source not found
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Loans to Indian Resident Individuals ▪
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1. Quantum of Loan
Purchase/Construction
Minimum - Rs 7,500/-
Maximum - Rs 25,00,000/-
Upgradation/ Major Repai
rs/ Additional Construction
Minimum Rs 7,500/-
Maximum Rs 5,00,000/-

3 PNB Housing Finance

We provide housing finance to individuals for construction or for acquisition/


purchase of house/ flat from development authorities such as DDA/HUDA/
PUDA/RHB etc. and also from private builders/groups housing societies.

4 SBI Housing Loan

SBI Housing loan schemes are designed to make it simple for you to make a
choice at least as far as financing goes! Error: Reference source not found
5 GE Money Home Loan
Shift to your dream home today
Still living in a rented apartment?
Is owning your own home still a distant dream.

6 HDFC Housing Finance

A new home brings with it new hopes, joys and emotions. At HDFC, we have
shared new hopes, joys and emotions with over 26 Lakh customers. Every
customer has a specific and unique concern.Error: Reference source not found
7 HUDCO NIWAS

INDIVIDUAL HOUSING FINANCE SCHEME (FOR RI'S)


Property:
Housing Urban Development Corporation (HUDCO) offers Niwas scheme. The
scheme is a housing finance instrument for individual families which offers loan
assistance to individuals constructing or buying a house or a flat.

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8 ICICI Home Loan

ICICI Bank offers easy home loans for purchase / construction of flat / house.
Also you can avail of host of other benefits like:
Attractive Interest Rates
Simplified Documentation
Doorstep Service.

9 LIC Housing Finance

Loan Amount : Min. Rs. 25,000 - Max.Rs.1,00,00,000.


Loan to Property Cost : 85% of total Cost of the property including Stamp Duty
and Registration Charges.

10 Sundaram Finance Group


Availing Home Loans you could
construct a house on your plot of land
purchase an apartment from a builder
purchase a bungalow/apartment on a second hand basis.
Home loan
Eligibility
Home loan eligibility for Resident Indians depends upon the repayment capacity of the
loan applicant. The maximum loan that can be sanctioned varies with the banks and other
housing finance companies (HFC) and generally, the maximum loan amount granted is
80 to 85% of the cost of your home.
Home loan eligibility corresponding to repayment option is based on the following
factors. Even though, the eligibility criteria may vary according to the HFCs regulations.
Home loan Eligibility Criteria
Age
21 Years
(Minimum)
Age
58(salaried)
(Maximum)
60(Public
limited/Government
Employees)
65 (self employed)
Qualification Graduation
Stable source of
Income income and saving
history
Number of
Dependents dependents, assets,
liabilities
Other income
Spouse's income
sources

As home loan rates increase, the loan eligibility for a borrower becomes stiffer. In such a
scenario, some home loan borrowers might have to re-evaluate their options (in terms of
loan amount) on account of the new eligibility criteria. Home loan eligibility can be
enhanced by:
i) Increasing the Home loan tenure
One of the basic process of enhancing the home loan eligibility is by opting for a higher
tenure. This is so because the EMI, which an individual has to pay, starts to decline as the
tenure increases while the interest rate as well as the principal amount remains the same.
What changes though, is the net interest outgo, which rises with a rise in tenure. And
since the individual is paying a lower EMI now, his 'ability to pay' and therefore his loan
eligibility automatically increase.
ii) Repaying other outstanding loans
There might be adverse effect on home loan eligibility for individuals with outstanding
loans like car loans or personal loans. Industry standards suggest that existing loans with
over 12 unpaid installments are taken into account while computing the home loan
borrower's eligibility. In such a scenario, individuals have the option of prepaying in
part/full their existing loans. This will ensure that their eligibility for the home loan
purpose is unaffected.
iii) Clubbing of incomes
Home loan eligibility can also be enhanced by clubbing incomes of spouse, children (son
or daughter) staying with the applicant and having regular income and even earning
parents (father or mother) living with the applicant. The eligibility in such cases, will be
calculated on the clubbed income of both the applicants enhancing the individual's
eligibility to the extent of the co-applicant's income.
iv) Step-up loan
Individuals can also enhance their loan eligibility by opting for step-up loans. A step-up
loan is a loan wherein an individual pays a lower EMI during the initial years and the
same is enhanced during the rest of the loan tenure. HFCs usually consider the lower EMI
of the initial years to calculate his loan eligibility while the initial lower EMI helps
increase the individual's 'capacity to borrow'.
v) Perks
Salaried individuals must ensure that variable sources of income like performance-linked
pay among others are taken into consideration while computing their income. This in turn
will imply that the loan amounts they are eligible for stand enhanced as well.
However, potential investors and borrowers must work out solutions best suited for their
profile after speaking to their home loan consultant and only then consider acting on the
options discussed. Because, increasing loan eligibility can have an impact on other
aspects of their financial planning.

New RBI directive for home loans


The Reserve Bank of India (RBI) has in the latest directive asked the Indian banks to be
more "fair and transparent" while signing their agreements with the consumers. This has
come following complaints from various consumer sections regarding home loans.
It has emphasized on the fact that while giving a home loan, the banks should not tie their
loans with their own prime lending rates (PLR) which often results in pro-bank and
against consumer interest.
Households should get credit counseling before signing any loan agreement. In such
case, banks should give credit counseling to customer before giving a loan. Any
non-governmental organization can also give independent credit counseling to
small borrowers.
Consumers often complain of not receiving benefits of falling interest rates as banks
tie their floating rate loans with its PLR and even when rates fall, the banks kept
the PLR unchanged. But when interest rates are hiked, the banks increase the
benchmark rate, thus making customers pay a higher rate and consequently
increase the number of EMIs too. The RBI has asked the banks to mend rules for
the same.
Individual borrowers should ask for the exact tenure and EMI while taking a fixed
rate loan. The RBI has also resolved to look into all consumer complaints if it is
bought to the regulator's notice.
The IRDA (insurance regulator) has powers to take action against banks if a customer
feels cheated while buying an insurance product. On its regulatory role, the RBI is
trying to maintain a balance between the extent of freedom granted to the banks
and the objectives of governance.
RBI has made it mandatory for all banks - including private and foreign banks - to
offer a passbook to their customers with the address and telephone number of the
nearest branch.
Customers have often been harassed by banks' call centers where there is no
accountability of the query made. The "do not call" registry has also been flouted
by banks as customers are bombarded with unnecessary product offerings. The
RBI has directed the Indian Banks' Association to come out with a single "do not
call" registry or when a customer adds his name to a single bank registry it should
then stop unsolicited calls from all banks.
On rising credit card frauds and wrong statements given by the banks, the RBI has
asked the customers to approach the ombudsman to redress their problems. This
way the RBI feels would inculcate more consumer friendly practices among
Indian banks.

Repayment options
Every housing finance companies or banks have customized repayment options to suit
every individual's requirement and also repaying capacity with some tax benefits. They
have thereby come up with more flexible and Multiple Repayment Option.
A few among them are:
Step-up Repayment Facility
The objective of step-up repayment is to provide the borrower with a repayment schedule,
which is linked to expected growth in income. It not only helps a customer get a larger
amount of loan as compared to the loan under the normal housing loan; but the customer
can avail of a higher amount of loan and pay lower EMIs in the initial years, which is
subsequently accelerated proportionately with the assumed increase in his income.
Flexible Loan installments Plan
This repayment option offers a customized solution to suit the needs of customers whose
repayment capacity is likely to alter during the term of the loan. In cases when a borrower
is nearing retirement, the loan is structured in such a way that the EMI is higher during
the initial years and subsequently decreases in the latter part proportionate to the reduced
income of the customer. This option helps such customers combine the incomes and take
a long term home loan where in the installment reduces upon retirement of the borrower.
Tranche Based EMI
Customers purchasing an under construction property, need to pay interest (on the loan
amount drawn based on level of construction) till the property is ready. Tranche Based
EMI is a special facility offered by some banks to help customer save this interest.
Customers can fix the installments they wish to pay till the property is ready. The
minimum amount payable is the interest on the loan amount drawn. Anything over and
above the interest paid by the customer goes towards principal repayment. The customer
benefits by starting EMI and hence repays the loan faster.
Accelerated Repayment Scheme
Accelerated Repayment Scheme offers you a great opportunity to repay the loan faster by
increasing the EMI. Whenever you get an increment, increase in your disposable income
or have lump sum funds for loan prepayment, you can benefit by
Increase in EMI means faster loan repayment
Saving of interest because of faster loan repayment
Or invest lump sum funds rather than use it for loan prepayment. The return from the
investments also gives you the comfort of paying the increased EMI.

Balloon Payment
Balloon Payment is an augmentation tool offered by the financial institutions, which
helps in increasing the loan eligibility of the customer without increasing the EMI by
assigning securities like National Savings Certificate (NSC), LIC policies etc. The
present value of the maturity amount of assigned securities is combined with the loan
amount to arrive at the enhanced loan eligibility. Under this facility, the EMI is calculated
on the net loan amount (i.e. total loan less the present value of the maturity value of the
securities).
Home Loan Tenure
Home loan tenures fixed by RBI are available up to a term of 15 years. Some financial
institutions have home loan tenures in the range extending up to 20, 25 and 30 years if the
applicant fulfils certain criteria. However, you cannot opt for a term that extends beyond
your attaining retirement age or 60 years of age (whichever is earlier).
Home loan Tenure:
Type of Salar Self-
Property ied Employed
15
Residential 10 years
years
10
Plot of Land 10 years
years
Against
15
Existing 10 years
years
Plot of Land
Tax benefits
There are certain tax benefits for the resident Indians based on the principal and interest
component of a loan under the Income Tax Act, 1961. It may help one get tax benefit up
to Rs. 50,490 p.a. (approx). if interest repayment of Rs. 1,50,000 p.a. is paid. In addition
to this, one also is eligible for getting tax benefits under section 80C on repayment of Rs.
1, 00,000 p.a. that further reduces the tax liability by Rs.33.660 p.a.
These deductions are available to assesses, who have taken a loan to either buy or build a
house, under Section 24(b). However, interest on borrowed capital is deductible up to Rs
150,000 if the following conditions are fulfilled:
Capital is borrowed for acquiring or constructing a property on or after April 1, 1999.
The acquisition and construction should be completed within 3 years from the end of
the financial year in which capital was borrowed.
The person, extending the loan, certifies that such interest is payable in respect of the
amount advanced for acquisition or construction of the house
A loan for refinance of the principle amount outstanding under an earlier loan taken
for such acquisition or construction.
If the conditions stated above are not fulfilled, then the interest on borrowed capital is
deductible up to Rs 30,000 though the following conditions have to be satisfied:
Capital is borrowed before April 1, 1999 for purchase, construction, reconstruction
repairs or renewal of a house property.
Capital should be borrowed on or after April 1, 1999 for reconstruction, repairs or
renewals of a house property.
If the capital is borrowed on or after April 1, 1999, but construction is not completed
within 3 years from the end of the year, in which capital is borrowed.
In addition to the above, principal repayment of the loan/capital borrowed is eligible for a
deduction of up to Rs 100,000 under Section 80C from assessment year 2006-07.
Terms and conditions for availing Tax benefits on Home Loans
1 Tax deductions can be claimed on housing loan interest payments, subject to an
upper limit of Rs 150,000 for a financial year.
2 An additional loan for extension/improvement to the same house and the
individual's deductions on the existing loan are less than Rs 150,000; he can claim
further benefits from the additional loan taken, subject to the upper limit of Rs
150,000 for a financial year.
3 Tax benefits under Section 24 and deduction under section 80C of the Income Tax
Act can be claimed only when the payment is made. If an individual fails to make
EMI payments, he cannot claim tax benefits for the same.
4 According to the Income Tax Act, tax rebates can only be claimed by the loan
applicant.
5 The interest on home loans taken for repairs, renewals or reconstruction, also
qualifies for the deduction of Rs 150,000.
6 A husband and wife, both of whom are tax-payers with independent income
sources, get tax deduction benefits, with respect to the same housing loan; to the
extent of the amount of loan taken in their own respective name.
7 If an individual buys a house and sells it within the same year or after 3 years, and
if any profit is made, then a capital gains tax liability arises on the same for which
the individual is liable to pay short-term capital gains tax since the sale took place
in the same year. But in case, if the sale had taken place after 3 years, then a long-
term capital gains tax liability would have arisen.
8 On being proved that the home loan is simply an arrangement between the loan-
seeker and the builder or with a third party for the purpose of claiming tax
benefits, then tax benefits will not be allowed and benefits, previously claimed,
will be clubbed to the income and taxed accordingly.
9 Tax benefits on interest on housing loans are allowable only for the original loan
and according to Section 24 (1), tax benefits can also be availed for a second loan
taken to repay the first loan but not for subsequent loans. This means that if you
have already availed of one loan to refinance the original loan and want to now
avail a third loan to refinance the second loan, tax rebate on interest payments will
not be permissible.
Documentation
Documentation refers to the specific documents to be submitted by Resident Indians as
they apply for home loan. These documents are very much necessary for the financial
institutions to avoid any dispute and uncertainty. The documents to be provided by the
resident Indians include income proof, property documents and personal identification
documents, etc. which of course varies based on the borrowers financial status and the
type of loan you want to avail.And of course every resident Indian should follow some
eligibility criteria before apply Home Loans in India.
However, there are some standard documents made mandatory for a loan applicant to
produce such as the loan applicant's profile, earning life of the applicant and present
financial status proof etc.
The Applicant's Profile refers to the bio-data of the applicant, mentioning his address,
age, family background and detail information.
The Earning Life of the Applicants' proof clarifies the capability of the loan payment.
The Present Financial status gives the present capability of handling the own
contribution and other expenditures. This includes the mortgage to be deposited
against the loan amount.
List of Documents
Salaried Customers Self Employed Professionals Self Employed Businessman
Application form with photograph Application form with photograph Application
form with photograph
Identity* and Residence Proof** Identity and Residence Proof Identity and Residence
Proof
Latest Salary-slip Education Qualifications Certificate and Proof of business
existence-Education Qualifications Certificate and Proof of business existence
Form 16 Last 3 years Income Tax returns (self and business) Business profile
Bank statements (last 6 months) Last 3 years Profit /Loss and Balance Sheet Last 3
years Income Tax returns (self and business)
Last 3 years Profit /Loss and Balance Sheet
Processing fee cheque Bank statements(last 6 months) Bank statements(last 6 months)
(self and business)
Processing fee cheque Processing fee cheque
*Proof of Individual's Identity (any one of the following)
 Passport
 Photo PAN Card
 Defence Identity Card
 Voter's Identity Card
 Driving License
 Photo Ration Card
 Government Identity Card
**Proof of Residence (any one of the following)
 Passport
 Ration Card
 Telephone (Land/Mobile) Bill
 Electricity Bill
 Driving License
 Society Outgoing Bill
 Voter's Identity Card
 Life Insurance Policy
Only Passport can be used as both Proof of Individual's Identity and Proof of
Residence.
** Proof of Age (any one of the following)
 Passport
 Valid Driving License
 Voter's Identity Card
 Birth Certificate
 School leaving certificate
 LIC Policy or Premium Receipt clearly indicating the applicant's age
 Letter from the employer stating the age of the employee
 Photo Ration Card