To help readers keep pace with what’s happening in the real estate sector, Mint’s Q&A will appear every other Monday.
I took a home loan from a leading bank in 2006 for a 20-year tenure. The loan amount outstanding is Rs7.63 lakh, with an equated monthly instalment (EMI) of Rs7,809. I am left with around 222 months. I would like to reduce the repayment period to 10 years, that is, 120 months, as my salary has increased. What are my options? What are the additional charges I need to pay?
In case you have some surplus funds you could consider making part prepayment and thereby reduce the tenure while keeping the same EMI. However, you may want to check with the bank whether prepayment charges (if any) are applicable on the amount being prepaid. The other option is, you could request the lending institution to increase your EMI to an extent you are comfortable with while reducing the tenure.
I have availed of a housing loan to buy a house in Ramnagar, in Uttarakhand. I currently live in New Delhi. I have let out the property for the next two years. I will be moving to that house at that point. I wanted to know if there would be any problem in availing tax benefits if a person lives in Delhi and buys a house in Ramnagar to rent out.
You can claim tax benefits for your rented property in Ramnagar even though you are staying in Delhi. You can set off the entire interest payment in excess of net rental income (rent received less standard deduction and municipal taxes) paid on the rented house against your income. In addition, you can claim tax benefit under section 80C on repayment of the principal amount. However, it will be part of the overall 80C benefits.
Renu Sud Karnad is joint managing director, HDFC. Readers may write in with their queries and comments to firstname.lastname@example.org