Terraform Realty – Leaders in Real Estate Development

Home Finance
An economy that has swung back into growth mode is fuelling the dreams of millions. Now you are reaching ever closer to a dream home in Terraform Realty. Home Finance now being affordable and convenient, we at Terraform Realty are seizing this opportunity to serve you better. With easy home loans bridging the gap between you and your dreams, living the lifestyle you deserve will soon become a reality.

Home Loans: Money Matters
Before you decide to apply for a home loan, it is best to calculate the entire cost well in advance and thereby, avoid any future surprises. Along with interest rates and EMIs in the home loan facility, there are several other costs which need to be borne by the borrower. It has recently become mandatory for the borrowers of the loan amount to get the home insured in order to safeguard their interests. Other cost factors like the processing fee, administration fee, valuation fee, legal fee, etc. need to be paid at the time of loan application, while certain other costs must be paid during the closing time.

To further assist you in the process of procuring the right loan, here’s some a list of the essential information and documentation:

Eligibility	Salaried	Self-Employed
1.Minimum Age	21 years	21 years
2.Maximum Age	65 years	70 years
3.Minimum Income (annual)	Rs. 1,00,000	Rs. 1,50,000
4.Minimum years in service	1 year	Not Applicable
5.Min years of Bussiness. Existence	Not Applicable	3 years
6.Minimum loan amount	Rs. 2,00,000	Rs. 2,00,000
7.Maximum loan amount	Rs. 2,00,00,000	Rs. 2,00,00,000
8.Minimum loan tenure	5 Years	5 Years
9.Maximum loan tenure	20 years	20 years
10.Loan to value ratio	85% of Agreement Value	85% of Agreement Value

Documentation

PROOF OF IDENTITY (any one)
- Passport
- Driving License
- Voter's ID
- PAN Card
PROOF OF RESIDENCE (any one)
- Ration Card
- Utility Bill
- LIC Policy Receipt
PROOF OF AGE
- Passport
- Driving license
- SSC Mark sheet.
PROOF OF SIGNATURE
- PAN Card
- Passport
PROOF OF INCOME (Salaried)
- Latest 12 months Bank Statement from Salary Account
- Latest Salary Slips
- Form 16
PROOF OF INCOME (Self Employed)
- Latest 12 months Bank Statement from Operating Account
- Proof of Company profits.
- Last 2 years ITR with Computation of Income/Certified Financials, Proof of Turnover (Latest Sales/Service Tax Returns.)
SECURITY DOCUMENTS
- Documents of Equitable Property and/or Other suitable Collateral Security eg. Life Insurance Policies
- Marketable Shares and other such Investments
- Other suitable collateral security applicable by select banks & customer specifics

Click here to know more on Direct Tax Code by the Government Of India

Tax Benefits on Home Loans

As the Indian real estate market makes an upward swing, and investors opt for housing finance or home loans, tax benefits obtained from them is a lucrative option. Customers availing of Home Loans can claim a certain portion of the interest and principal that they pay towards the loan installments for reducing tax liability. Resident Indians are eligible for certain tax benefits on principal and interest components of a loan under the Income Tax Act, 1961. Moreover, an added tax benefits under Sec 80 C on repayment of principal amount up to Rs. 1,00,000 p.a. can be availed that can further reduce your tax liability by about Rs. 30,000 p.a
Tax benefits can be claimed on both the principal and interest components of the home loan as per the Income Tax Act, 1961. These deductions are available to assesses, who have taken a loan to either buy or build a house, under Section 24(b). Interest on borrowed capital is deductible up to Rs 150,000 if the following conditions are satisfied:

Capital is borrowed on or after April 1, 1999 for acquiring or constructing a property.
The acquisition/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

Tax deductions can be claimed on housing loan interest payments, subject to an upper limit of Rs 150,000 for a financial year. Interest on the fresh loan can be claimed as a deduction, subject o the stated upper limit.
An additional loan for extension/addition to the same house and the person'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.
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 a person fails to make EMI payments, he cannot claim tax benefits for the same.
According to the Income Tax Act, only the person who has taken the loan can claim tax rebates.
The interest on home loans taken for repairs, renewals or reconstruction, also qualifies for the deduction of Rs 150,000.
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.
If a person buys a house and sells it within the same year/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, if the sale had taken place after 3 years, then a long-term capital gains tax liability would have arisen.
If it is 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.
Tax benefits on interest on housing loans are allowable only for the original loan and for a second loan taken to repay the first loan and 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. This is because the Section 24 (1) only talks of the second loan and not of subsequent loans. Even if you take the second loan at a rate of interest higher than the original loan, you will be eligible for a tax rebate on the second loan.

* Please refer to the latest direct tax code being introduced by the Government of India while you plan your investments & loans

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