Is a retired employee eligible for a home renovation mortgage?
I’m a 55-year-old retired authorities employee who must renovate my house, assemble one different flooring and lease it out for an extra provide of earnings. Am I eligible for a home mortgage or should I make partial withdrawal from my provident fund (PF)?
—Name withheld on request
Many lenders current dwelling loans for renovation and the addition of 1 different flooring. Here are some parts that may determine the eligibility for a mortgage: The renovation plans have to be accepted by respective authorities; the additional improvement must be for residential features; and an architect’s plan and estimate from a civil contractor have to be in place.
There are diversified mortgage selections accessible for pensionerss, offering charges of curiosity at par with another salaried borrower and extended compensation intervals, sustaining your current age in ideas.
You should ideally check out a public sector monetary establishment for meeting your personal house mortgage requirement. They could ask in your associate/children to be co-applicants in your mortgage.
Another situation to recollect is the utmost outgo out of your pension, allowing in your common household payments to be left unhindered. Usually, the lender moreover has a certain proportion that could be allowed out of your pension within the path of the mortgage compensation. It might be prudent to not take the proposed lease into your month-to-month mortgage compensation calculations . Once the leases are acquired, you’ll be able to start making part-payments or enhance your EMI amount, which could help in bringing the final tenure and curiosity outflow down.
What are the tax implications for selling a property that I had inherited from my grandparent in 2022. I’m a homemaker with no completely different sources of earnings.
—Name withheld on request
When a property is acquired by the use of inheritance or as a gift, it is not taxable for the receiver. However, if that’s subsequently supplied, the income will doubtless be matter to capital constructive elements tax . In such a case, the categorisation of capital constructive elements (temporary time interval or future) for taxation features will depend on the size for which the property was held by your grandparent and later by you. A marginal tax charge is related on temporary time interval capital constructive elements whereas a flat tax charge of 20% is related on future capital constructive elements. The distinction between the sale worth and the related charge worth of the property could be the capital constructive elements on the sale of the property.
• Cost of the Property: The property did not value one thing to the inheritor, nonetheless for calculation of capital obtain the related charge to the sooner proprietor is taken into consideration as the worth of acquisition. Expenses, if any incurred by the inheritor on the advance of the property will doubtless be added to the related charge.
• For LTCG, the worth of the property will doubtless be matter to Indexation. In the case of inherited property, the 12 months of acquisition of the sooner proprietor is taken into consideration for indexation of the worth of acquisition.
• For an Indian resident, the capital Ggins will doubtless be eligible for the basic exemption limits of earnings tax. However, no deduction beneath sections 80C to 80U is allowed on LTCG.
Amit Bhachawat is the CFO, India Mortgage Guarantee Corporation
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