Your questions: Loans | Home loan and additional home loan eligible for tax relief within overall limits

Once used for the basic home loan, it can no longer be used for the additional home loan.

By Chaitali Dutta

Is the interest and principal paid on the supplemental home loan eligible for deduction under Section 24 and Section 80C?
—Samuel D.

From a tax deduction point of view, both the home loan and the complementary home loan are eligible. However, the deductions are subject to the aggregate limit of Rs 1.5 lakh for Section 80C and an aggregate limit of Rs 2 lakh for reimbursement under Section 24, for a single person. Therefore, once used for the basic home loan, it can no longer be used for the additional home loan.

My mother took out a loan in 1996 and died in 1997. The guarantor of this loan was my father and my grandfather. They are both dead. Currently, the cooperative bank does not allow me to withdraw money from my grandmother’s account. The account is in my grandmother’s name and the second holder was my grandfather. How can we get the money?
— Sourav Bhowmick

From the above, it is not clear whether the loan taken out by your mother has been repaid (including interest). If there is an unpaid amount not cleared by the guarantors as well, the bank is within its right to freeze this account. Once you have paid the outstanding amount, this will remove the withdrawal restrictions.

My building is being remodeled. My wife and I own an apartment each in a single name. How can I add our names as joint owners with equal rights? Can our names be added to the new development agreement?
-Sharad

Yes it’s possible. The co-holders will by default have equal rights unless otherwise stipulated in the contract itself. Keep properties in common names as this reduces paperwork in case a transfer of ownership is needed.

I am buying a secondary residence. Should I repay the first loan and then opt for the second home loan?
—Ravi Mishra

The interest rate is the only thing you should look at. If the old loan is cheaper, continue. The bank will calculate your eligibility based on the old current loan. You can qualify for a new, smaller loan, which will increase your margin money in the new property.

The author is the founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your questions to [email protected]