Your Queries – Loans: Top-up home loan: Use the money on that property only to get tax benefit

You can split the EMI and take income tax exemption under Section 80C and Section 24, individually.

By Chaitali Dutta

Is the interest and principal paid on top-up home loan eligible for deduction under Section 24 and Section 80C? My bank denies this.
—Gurpreet Singh Sehgal
A top-up home loan is eligible for tax benefits under Section 80C and Section 24 if it has been utilised for acquisition/ construction of residential property or renovation of the said property. If you have the required receipts as proof, you can formally write to them to issue the interest certificate. The benefits of Sections 80C and 24 will be applied by your CA while filing your IT returns.

I bought an under-construction flat with a bank loan. The builder got Rs 10 lakh from the bank. For the remaining Rs 3 lakh, he is asking me to coordinate with the bank. Is it my responsibility to coordinate with the bank?
—Sagar Challa
The home loan is a binding agreement between you and the bank. The builder is not a party to it. Whereas if you look at your sale agreement, it is between yourself and the builder. The builder will issue demand letter to you on completion of certain stages of construction. You have to approach the bank with the demand letter, and it will disburse the amount as per the agreement value. So, it is you who has to coordinate with the bank at each disbursal.

As I have five years of service left (I am 55), can I apply for a joint home loan with my only daughter who is working and unmarried (age 30)?
—Arvind Kansal
Yes. The loan eligibility will be calculated on your joint current income. The loan tenure can be more than five now, as your daughter has another 25-30 years of income inflow capability. You can split the EMI and take income tax exemption under Section 80C and Section 24, individually. The property has to be registered in joint name.

I am yet to get the PMAY subsidy for my ICICI Bank home loan application in November 2020. What should I do?
—Sunil Khanse
The bank should be able to give you a view as to when to expect the subsidy. You may also check for the status of your application at the following website PMAY-HFA(Urban) (pmaymis.gov.in) with your name, father’s name & mobile number, or the Assessment ID.

The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance. com). Send your queries to fepersonalfinance@expressindia.com