Home loan full payment

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Querist : Anonymous

Querist : Anonymous (Querist)

02 July 2013 Hi,
I have taken a housing loan from HDFC of 25 Lac of tyenure 20 years one year ago. now my father is getting retired from his job and want to pay full loan from his money. he is neither a co-borrower of loan nor we have any joint loan on this property. Loan is taken by me only.

Is this possible and how? do we have to pay any taxes for the same and does bank will raise any question.

My father will be totally my dependent and will be with me now onwards.

Please suggest, thanks in advance

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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02 July 2013 You may thank later also after 10-20 years for the suggestions.
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There is no problem if you accept the amount from your father by cheque and repay the loan.
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But..... do not use the whole retirement money in this way and make your father a dependent.
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He will enjoy his old age better if you plan his investments in such a way that from the earnings of his investments he can help you in repaying your loan or meeting the house hold expenses.
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By repaying loan you can save/lose differential interest only and lose tax benefits.
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So in my view, do not take the retirement money from your father. Try to pay it from your own income. You can increase the installment, if you can.
Do not make parents dependent on you. Life is not so easy as it is being seen today.
.

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CA.Vinita Gupta

CA.Vinita Gupta (Expert)
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03 July 2013 Agreed with Paras Sir, If you repay the Housing Loan now then you have already paid the Interest Element for 1 year.
So this is a Total Loss for you

Secondly if the have the Housing Loan you can get the Benefit of Sec 24 and thus reduce your taxable Income.

Thirdly your father has the right to enjoy his retirement with his hard earned money.

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Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2013 Thanks a lot for your concern and good advice Dear Paras Sir and Vinita mam. Please try to understand my query from taxation point of view.

I want to know if i accept money anyway what taxes i need to pay and do bank will have any question regarding the same for paying loan from it.

in my calculation im just saving 4-8k(principal) in 80 c and 15-20k(interest) in 24b and paying 3 Lac as interest to bank so its better to pay tax to government than to bank. and if i'll be loan free i can better take care of my parents and family without ant tension.

CA.Vinita Gupta

CA.Vinita Gupta (Expert)
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04 July 2013 Housing Loan is the cheapest Loan. Personal Loan is 18%.

Why dont you Invest your fathers money in some other Investments like Another Real Estate and earn appreciation of the same?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 July 2013 Reply from taxation point of view :
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If you take money from your father and clear the bank loan you will have not to incur any tax liability. You may do so happily.

TAX PLANNING :
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Presently you are paying interest to HDFC Bank around @12% and getting tax benefits also. You can continue to enjoy the interest benefit. On the amount borrowed from father , you may pay interest to him at a convenient rate say 8% or 6% looking to the fact that for SOP you get interest benefit of Rs 150000/- and father's tax liability. You can claim interest U/s 24(b)
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Your father may have to pay tax as he might be receiving pension also. Still tax saving can be made U/s 80C by investing Rs. 100000/- in his name
.

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Querist : Anonymous

Querist : Anonymous (Querist)

05 July 2013 Genius reply Dear Paras Sir, got my query resolved with some really helpful advices.