Category: News That Helps | NTH

NTH :: SBI reduces home loan rates by up to 25 bps

By Saloni Shukla, Sangita Mehta | ET Bureau|Updated: May 08, 2017, 03.38 PM IST | Economic Times

NTH

MUMBAI: Country’s largest bank, State Bank of India has reduced home loan rates between 10 to 25 basis points, a move that will force other lenders to reduce rates. SBI has refrained from cutting its marginal cost of lending rate (MCLR) which stands at 8% for one year. SBI has the largest share on the home loan market.

The bank will now charge salaried borrowers 8.35% on home loans upto Rs 30 lakhs as against 8.60% For loan above Rs 30 lakhs bank will charge 8.50%, down by 10 bps. The bank will continue to charge 8.60% on loans above Rs 75 lakhs. The rate cut will help only the new borrowers since the existing borrowers are locked into one year fixed rate on interest as per the rule of arriving at lending rates.

The reduction in rates comes within a month of five associate banks merging with the parent bank. Recently SBI cut deposit rates sharply by 50 basis points across different maturities.

SBI has also said that an eligible home loan customer can also avail of an interest subsidy of Rs. 2.67 lacs under the Pradhan Mantri Awas Yojana scheme. SBI said that to supplement the affordable housing push, SBI has also come out with special offerings for construction finance to the builders for affordable housing projects. “This will give a dual push both for construction finance and also for home finance for affordable homes.”

Mr Rajnish Kumar, managing director, SBI said, “We have seen a steep hike in the home loan enquiries recently and reduction in rates will further help millions of home buyers fulfill their dream of owning a home. Individuals can apply for home Loans through multiple channels.”

Source: https://goo.gl/ReoG9P

NTH :: Now Transfer Your Home Loan To SBI At Zero Processing Fees

SBI, the country’s biggest lender is charging zero processing fee on home loan takeover till June 30, 2017.
NDTV Profit Team | Last Updated: May 07, 2017 07:45 (IST) | NDTV Profit

NTH

Do you have a Home Loan with any bank or housing finance company at higher interest? If yes, then it may be a good opportunity for you to transfer your existing home loan to State Bank of India, as the country’s biggest lender is charging zero processing fee on home loan takeover till June 30, 2017. Even you can get higher than the amount currently outstanding in your home loan from SBI if you match their eligibility criteria, the state-owned lender said in its website.

Here are the details you need to know:

Home Loan can be taken over from the following Institutions:
Scheduled Commercial Banks (SCBs),Private and Foreign Banks, Housing Finance Companies (HFCs) registered with National Housing Bank (NHB), Borrower’s employers if they are Central/State Governments or their undertakings or Public Sector Undertakings.

Criteria
The borrower should have serviced interest and/or installment of the existing loan regularly, as per the original terms of sanction.

The borrower should have valid documents evidencing the title to the house/flat.

Whether take over with sanction of Higher Loan Amount & extended Repayment Period is possible?
Yes. Based on the merits of the case and requirements/ eligibility of the borrower, the Bank may sanction an amount higher than the amount taken over from other bank/ financial institution for purposes of renovation/ extension/ furnishings. Similarly extended repayment period may be sanctioned provided that at all times the criteria regarding maximum permissible finance and security margin under the Bank’s scheme are not diluted.

What is the procedure for Take Over?
The borrower should address a letter to the bank/ financial institution from whom he has availed the loan asking them to deliver, immediately upon receipt of the loan amount, the title deeds and other securities, if any, direct to our lending branch;

The borrower should give to the branch a request letter for paying to his existing lending bank/financial institution the outstanding amount of his loan by debit to his loan account.

The borrower must give an advice of the actual outstandings (with up-to-date interest) in the loan account from the other bank/ financial institutions; the statement of Account for the entire period of loan or for the last 10/12 months where the loan has run for a longer period;

Confirmation letter from the financing Bank that they have created an equitable mortgage over the property.

Documents required for availing the loan:
Disbursal must be effected only subject to the above information being found satisfactory and completion of formalities as regards

Agreement to create Mortgage, Power of Attorney in the favor of the Bank authorizing the Bank to create equitable mortgage on the borrower’s behalf.

Interim security (Ex: Bank Deposit Receipts, LIC Policies, etc) and the security obtained in the interim period will be released after receipt of the title deeds then the other Bank and creation of a valid equitable mortgage subsequent to verification of the borrower’s title to the property.

Whether pre-payment penalty is funded?
Yes. Total loan quantum, will however, continue to be determined by eligibility criteria based on income, EMI/NMI ratio, LTV ratio etc. applicable to Home Loans scheme.

Whether takeover of Home Loan with Top up loan is permitted?
Yes

Source: https://goo.gl/F7sooH

NTH :: New Income Tax Rules On Home Loan Come Into Effect. Details Here

Now the limit that can set off against the loss from rented house property has been restricted to Rs. 2 lakh per annum.
Edited by Surajit Dasgupta | Last Updated: April 09, 2017 16:48 (IST) | NDTV Profit

NTH

The government has changed income tax rules that could increase the tax outgo of those who have taken a home loan for a property that has been rented out. The amount that could be set off on home loans for rented property has been reduced. Earlier, in case of rented property, the loss from house property – which is basically the interest paid on home loan minus rental income – was allowed to be adjusted from income without any limit. This helped significantly reduce tax liability. Now the limit that can set off against the loss from rented house property has been restricted to Rs. 2 lakh per annum. This came into effect from April 1, 2017 (assessment year 2018-19).

However, on rented properties, the interest paid above Rs. 2 lakh can be carried forward for eight assessment years. Since the interest component of home loan repaid in initial years is higher, experts say that the borrower may not be able to fully adjust the interest paid as deduction even in subsequent years.

For example, your interest outgo on a second property is Rs. 5 lakh in a particular year. Assume that you are earning a rent of Rs. 1.5 lakh annually from the property. Such buyers, as per the current rules, are allowed to adjust the difference of Rs. 3.5 lakh (Rs. 5 lakh interest minus Rs. 1.5 lakh). But from the next financial year, they will be allowed deduction of just Rs. 2 lakh. The remaining amount of Rs. 1.5 lakh (Rs. 3.5 lakh minus Rs. 2 lakh) can be carried forward up to eight financial years and be adjusted later.

Tax experts say that some high net worth individuals – who used to buy properties on loan and were able to set off the full interest liability against the lettable value of property and thus bring down their tax liability substantially – would be particularly hit from this new tax rule.

Note: Income tax rules say that those who own more than one property can only treat one of them as self-occupied and the rest have to be assumed to be rented. Income tax has to be paid on notional rent.

From April another tax rule related to the properties will also change. The new tax rule will help bring down tax liability from property sale. The holding period of a property for qualifying under long-term gains will get reduced to two years, from three years currently. As per current tax norms, if a property is sold within three years of buying, the profit from the transaction is treated as short-term capital gain and is taxed according to the slab rate applicable to him/her. So reducing this time period to two years will bring down tax liability.

Thus, after two years, the transaction will be able to qualify for long-term capital gains, thus lower taxes. Under long-term capital gains on immovable properties, the profit is taxed at 20 per after indexation. Under indexation, inflation during the holding period is taken into account and thus the purchase price is adjusted, reducing the tax burden on the property seller. There are also other benefits for the seller under the long-term capital gains tax. If the gains are invested in some select government investment schemes, the tax liability goes down significantly.

Source: https://goo.gl/N8K3mp

NTH :: Home loan EMIs of under-construction houses, renting & land leasing to attract GST from July 1

GST, which the government intends to roll out from July 1, 2017, will subsume central excise, service tax and state VAT among other indirect levies on manufactured goods and services
PTI | Updated: March 28, 2017, 18:29 IST | ET Realty

NTH

Home loan EMIs of under-construction houses, renting & land leasing to attract GST from July 1. Come July 1 and leasing of land, renting of buildings as well as EMIs paid for purchase of under-construction houses will start attracting the Goods and Services Tax.

Sale of land and buildings will be however out of the purview of GST, the new indirect tax regime. Such transactions will continue to attract the stamp duty, according to the legislations Finance Minister Arun Jaitley introduced in the Lok Sabha yesterday for approval.

Electricity has also been kept out of the GST ambit.

GST, which the government intends to roll out from July 1, 2017, will subsume central excise, service tax and state VAT among other indirect levies on manufactured goods and services.

The Central GST (CGST) bill — one of the four legislations introduced, states that any lease, tenancy, easement, licence to occupy land will be considered as supply of service.

Also, any lease or letting out of the building, including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services as per the CGST bill.

The GST bills provide that sale of land and, sale of building except the sale of under construction building will nether be treated as a supply of goods not a supply of services. Thus GST can’t be levied in those supplies.

‘Goods’ in earlier drafts of the bills were defined as every kind of movable property other than money and securities but includes actionable claim. ‘Services’ were defined as anything other than goods. It was thought that GST may be levied on supply of immovable property such as Land or building apart from levy of stamp duty.

But the bills presented in Parliament have now clarified this position.

Tax experts said that currently service tax is levied on rents paid for commercial and industrial units, although it is exempt for residential units.

Deloitte Haskins Sells LLP Senior Director M S Mani said: “While service tax is applicable at present on sale of under construction apartments, it is levied on a lower value as abatement allowed. The abatement is ostensibly to take care of the value of the land involved in the construction of apartments”.

He said the GST Rules, which will come up for discussion in the Council meeting on March 31, would help ascertain whether a lower rate of GST is proposed for such transactions or whether a similar abatement procedure would be prescribed.

“This would also be dependent on the rate fixation committee which is expected to finalise its recommendations in April,” Mani said.

Experts said service tax is currently levied on payments made for under-construction residential houses after providing abatement, which brings down the effective rate from 18 per cent to around 6 per cent.

“The government is trying its best to make GST litigation free. The bills very clearly specify that GST would be charged on any lease of land or letting out of the building or construction of a complex, building, civil structure or a part thereof, where whole or any part of consideration has been received before issuance of completion certificate or its first occupation,” Nangia & Co Director Rajat Mohan said.

Experts said the GST subsumes central levies like excise and service tax and local levies like VAT, entertainment tax, luxury tax. However, it does not subsume Electricity Duty.

Since the GST Constitution Amendment Act does not provide for subsuming ‘electricity duty’ under GST, it will continue to be levied by the respective state governments.

Certain states like Delhi exempt residential properties from electricity duty but levy it on commercial and industrial units.

Source : https://goo.gl/0mRlKH

NTH :: Income Tax Rules On Home Loan To Change From Saturday. Details Here

Tax experts say that some high net worth individuals, who used to buy properties on loan and were able to set off the full interest liability against the lettable value of property and thus bring down their tax liability substantially, would be particularly hit from this new tax rule.
Written by Surajit Dasgupta | Last Updated: March 28, 2017 09:01 (IST) | NDTV Profit

NTH

Interest paid above Rs. 2 lakh on rented properties can be carried forward for 8 years from April 1.

To address the anomaly of interest deduction in respect of let-out property vs self-occupied property, the government has changed income tax rules, which will come into effect from next financial year April 1, 2017 (assessment year 2018-19). In this regard, the government has cut down tax benefits borrowers enjoyed on properties let out on rent. According to current tax laws, for properties rented out, a borrower could deduct the entire interest paid on home loan after adjusting for the rental income. On the other hand, borrowers of self-occupied properties get Rs. 2 lakh deduction on interest repayment on home loan.

However, on rented properties, effective from April 1, interest paid above Rs. 2 lakh can be carried forward for eight assessment years. Since the interest component of home loan repaid in initial years is higher, experts say that the borrower may not be able to fully adjust the interest paid as deduction even in subsequent years.

For example, your interest outgo on a second property is Rs. 5 lakh in a particular year. Assume that you are earning a rent of Rs. 1.5 lakh annually from the property. Such buyers, according to the current rule, are allowed to adjust the difference of Rs. 3.5 lakh (Rs. 5 lakh interest minus Rs. 1.5 lakh). But from the next financial year, they will be allowed deduction of just Rs. 2 lakh. The remaining amount of Rs. 1.5 lakh (Rs. 3.5 lakh minus Rs. 2 lakh) can be carried forward up to eight financial years and be adjusted later.

Tax experts say that some high net worth individuals, who used to buy properties on loan and were able to set off the full interest liability against the lettable value of property and thus bring down their tax liability substantially, would be particularly hit from this new tax rule.

From April another tax rule related to the properties will also change. The new tax rule will help bring down tax liability from property sale. The holding period of a property for qualifying under long-term gains will get reduced to two years, from three years currently. As per current tax norms, if a property is sold within three years of buying, the profit from the transaction is treated as short-term capital gain and is taxed according to the slab rate applicable to him/her. So reducing this time period to two years will bring down tax liability.

Thus, after two years, the transaction will be able to qualify for long-term capital gains, thus lower taxes. Under long-term capital gains on immovable properties, the profit is taxed at 20 per after indexation. Under indexation, inflation during the holding period is taken into account and thus the purchase price is adjusted, reducing the tax burden on the property seller. There are also other benefits for the seller under the long-term capital gains tax. If the gains are invested in some select government investment schemes, the tax liability goes down significantly.

(Know Your Tax Liability Here)

Source: https://goo.gl/jwT9V2

NTH :: Pradhan Mantri Awas Yojana: How To Apply For Home Loan Interest Subsidy

This home loan interest subsidy scheme is part of the government’s ‘Housing for All’ initiative. The scheme will be implemented initially for a period of one year.
Written by Surajit Dasgupta | Last Updated: March 27, 2017 11:18 (IST) | NDTV Profit

NTH

The government last week announced guidelines on interest rate subsidy scheme under Pradhan Mantri Awas Yojana (Urban) for middle-income groups. The scheme has been named as Credit Linked Subsidy Scheme for Middle Income Groups – CLSS (MIG). Under the Pradhan Mantri Awas Yojana (Urban) scheme, middle income groups (MIG) with annual incomes of above Rs. 6 lakh and up to Rs. 18 lakh per year are eligible for interest subsidy on buying their first home. The scheme was earlier announced by Prime Minister Narendra Modi in his New Year’s Eve address to the nation.

Prime Minister Narendra Modi had announced interest subsidy of 4 per cent on housing loans of up to Rs. 9 lakh for those with an income of Rs12 lakh per year and of 3 per cent subsidy on housing loans of up to Rs.12 lakh for those earning Rs. 18 lakh per year. This home loan interest subsidy scheme is part of the government’s ‘Housing for All’ initiative. The scheme will be implemented initially for a period of one year. Additional loans beyond the specified limit, if any, will be at non-subsidised rate.

Here are 10 highlights of the interest rate subsidy scheme under Pradhan Mantri Awas Yojana (Urban):

1) Beneficiaries eligible for interest subsidy under the CLSS scheme have to apply to their lenders for availing the subsidy benefit.

2) Home loans sanctioned or applications are under consideration since January 1, 2017, are eligible for interest subsidy under the Credit Linked Subsidy Scheme for Middle Income Groups. The beneficiary earlier should not have own a house in his/her name.

3) The total interest subsidy accruing on these loan amounts will be paid to the beneficiaries up front in one go, thus reducing the burden of Equated Monthly Instalment (EMI).

4) Besides commercial banks, housing finance companies, regional rural banks, state and urban cooperative banks, other financial institutions like small finance banks and non-banking finance company-micro finance institutions can also lend under this scheme.

5) National Housing Bank (NHB) and Housing and Urban Development Corporation (HUDCO) will reimburse interest subsidy to the lenders. No extra processing fee will be charged by the lenders from borrowers.

6) Interest subsidy will be provided on loans for construction/acquisition of house with carpet area of up to 90 sq metres for those with income of up to Rs. 12 lakh per year and of up to 110 square metres for those earning between Rs. 12 lakh and Rs. 18.00 lakh per year.

7) Under the scheme, the tenure of loan has been stipulated to be 20 years or that preferred by the beneficiary, whichever is lower.

8) Sriram Kalyanaraman, MD and CEO of National Housing Bank, said that interest subsidy of 4 per cent will bring down EMIs of beneficiaries by Rs. 2,062 per month on a housing loan of Rs. 9 lakh and interest subsidy of 3 per cent will bring down EMIs by Rs.2,019 on a loan of Rs.12 lakh, taking normal housing loan interest rate as 8.65 per cent.

9) The total interest subsidy for middle-income people over 20 years on Rs. 9 lakh loan and Rs. 12 lakh loan comes to around Rs. 2.30 lakh per beneficiary (the present value of interest subsidy provided to beneficiaries over the tenure of 20 year loan at a discounting rate of 9 per cent.

10) Kotak Institutional Equities in a note said that the scheme will give a boost to the housing sector provided real estate players offer compact products at lower ticket sizes. This scheme will help bring down overall interest cost for home loan borrowers, the brokerage added.

Source: https://goo.gl/0ZCtM5

NTH :: SBI cuts base rate by 0.15% to 9.10%; your car, home loan EMIs set to decline

Business PTI | Apr, 03 2017 18:53:46 IST | Firtspost.com

NTH

New Delhi – Ahead of the RBI monetary policy this week, the country’s largest bank SBI has reduced benchmark lending rate by 0.15 percent to 9.10 percent, a move that will lower EMIs for borrowers.

Base rate or the minimum lending rate of the bank has been reduced from 9.25 percent to 9.10 percent effective April 1. The bank has also reduced its base rate by 0.05 percent to 9.25 percent.

Similarly, benchmark prime lending rate (BPLR) has also been reduced by similar percentage points to 13.85 percent from 14 percent.

With the reduction, EMIs for the new as well as existing borrowers who have taken housing and car loans at base rate will come down by at least 0.15 percent.

The new rate is effective from the date the bank merged five of its associates and Bharatiya Mahila Bank putting it on the list of top 50 large banks of the world.

The total customer base of the bank has reached 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs across the country.

The merged entity has a deposit base of more than Rs 26 lakh crore and advances of Rs 18.50 lakh crore. It is to be noted that the SBI has made changes in signage and logo, with its iconic keyhole set against the background of inky blue.

There have been minor changes in the design and colour of SBI’s new look from April 1.

The background to the SBI signboard has been changed from white to inky blue while the SBI logo or the monogram is a few shades lighter than the existing blue.

Source: https://goo.gl/JSytJz