What are Implications of death of home loan borrower?

Buying a grand house is every Indian's dream. While earlier most people bought a house after their retirement, modern people can become a homeowner in the early stage of life. This has been possible due to relaxation in home loan policies. In India, many people have successfully purchased their first home under PMAY. The scheme provides subsidy on interest, which makes loan repayment easier. But this does not mean that you will get any debt forgiveness.

Among the various reasons for nonpayment of a home loan, the borrower's death is the most common cause. The common question for every home loan borrower is what will happen to their home in case of their death. Will it force his family to vacate the house as the bank immediately takes over the property? Or, will all the installments of his home loan go in vain upon his death?

Well, before taking this topic further, let us explore the different categories of loans and the provision of loan repayment in each case.

1) Joint Loan - This type of home loan is taken jointly by two borrowers. If the primary borrower dies, the right to repay the home loan is given to another borrower. However, if the surviving co-applicant refuses to repay the loan balance, the lending bank may seek legal recourse in the civil court or the Debt Recovery Tribunal.

2) Secured loan- A secured loan is one in which the borrower pledges certain assets in case of failure to repay the loan. If the borrower of the secured loan dies, his / her spouse or heir will have to inform the bank about the same by presenting the death certificate.

In this case, the bank cannot take any coercive measures to force the surviving spouse or heir to repay the debt. In addition, for the recovery or enforcement of security, it must comply with the law.

3) Unsecured loan- In this case, the lending bank cannot claim unpaid loan from the surviving borrower or heir of the deceased borrower. However if the deceased borrower has left any property in the name of his partner or heir, the creditor can recover the outstanding amount by selling them after initiating appropriate legal action.

We conclude that things do not change much by the borrower's death. The loan still exists and has to be repaid by a co-partner, spouse or legal heir. The family of the deceased borrower can handle the mortgage in several ways. Here, we have mentioned some simple tips in this regard.

Tips 1- Repay the loan as per your convenience

The survivors can inform the bank about the demise of the borrower and continue to repay the loan. It can be difficult to arrange money. But in that case, you should inform the bank about your current financial situation. Most lenders are supportive of their customers and will provide them with suitable suggestions for repaying the mortgage.

Tips 2- Repayment and Refinance

The legal heirs of the deceased borrower can refinance the loan or they can repay the loan in full.

Tip 3- Sell or rent a house

If the spouse or heir has no regular source of income to repay the loan, they can resell or rent the home. Money received in this way can be used to repay the loan.

Tip 4- allow the bank to occupy the property

The survivor may allow the bank to recover the loan by selling the house at auction. If the immovable property is more than the debt owed on it, the difference from the sale proceeds will be transferred to the heirs.

Real Estate Sector benefits for Budget 2020

The Government of India has made its final presentation about the Union Budget of the session. The Union Budget has received some big news, acknowledging torpidity in the real estate sector that has been struggling with shallow growth over the past few years. The government has made some important disclosures that will provide the necessary ease to the common people. , Including home buyers as well as builders. This is an interesting budget, in which the government has tried to help the industry to control the decline in the real estate industry.

The realty sector that changes key are:

Exemption of TDS

The proposal to reduce GST on homebuyers is very helpful. Under the current Income Tax Act (Sec-194L), a person who is responsible for paying rent, has to deduct TDS on the amount paid if he passes more than Rs 1 lakh 80 thousand during a financial year. The Interim Budget 2019 proposed to increase this exemption limit from Rs 1 lakh 80 thousand to Rs 2,40,000 for a year. This step will be very useful for property owners who rent their property for business as they will receive higher rental income which will doubtless be deducted as tax. The move may entice more investors to buy a second home.

Demonetization rent

According to current regulations, when a person owns several residential homes, they can now choose one of them as "self-occupied" and the other will be seen as renting by default. Prior to this, no one would have to pay any tax on the "self-occupied" property, but the other would be charged the same as the house that was rented.

With this move, the government has tried to increase second home sales by meeting the criteria for genuine self-occupiers who already own a house. For self-occupied second homes, where families are living, consumers do not have to pay any tax on the rental income.

On the other hand, for the real estate industry, where flats / apartments serve as its index, the tax exemption on constitutional rent was proposed to be increased from 1 year to 2 years. This means that builders or developers will not have to pay any outstanding interest on their untax properties for a period of two years, for a period of two years after the completion of the project.

Income tax per year Rs. 5 Lakh

As per the Budget 2019 proposal, salaried employees with an income of up to Rs 5 Lakh per year will be exempted from income tax, and if they avail the 1.5 Lakh exemption available under 6.5 Crore per year, then earning 6.5 Lakh per year. Employees with the same will be exempted. Income Tax Act. However, tax rates have been retained. The proposal to give tax exemption for income up to Rs.5 Lakh will help in increasing the budget of the home buyer and may also provide for the demand of housing.

The new standard deduction limit, which is Rs 40,000 as per last year's budget, has been increased to Rs 50,000.

LTCG discount

Under Section 54 of the IncomeTax Act, the benefit of saving capital gains will increase from an investment in a residential house to a capital gain of up to two crore rupees for a taxpayer in two residential houses and this benefit can be availed only once in a lifetime.

Tax Benefit Expansion on "Housing for All by 2022"

Section 80-IBA was added on 1 April 2017 of the Income Tax Act to allow a 100% deduction on any profits or gains from the business of developing and building. This benefit is proposed to be extended for one year now, that all housing projects to be registered and approved under the Real Estate Regulatory Act by 31 March 2020. The move will force builders to develop more and more affordable housing projects but this tax exemption proposal is directed at setting limits based on the location of the house and the carpet area.

An interest grant on a home loan of 4% will be provided for housing loans up to Rs 9 lakh, with an income of Rs 12 lakh per year and a rebate of 3% on home loans up to Rs 12 lakh for those earning Rs 18 lakh. Last year has already been offered in the interim budget last year to improve housing demand benefiting homebuyers.

The conclusion

Apart from this, the above changes which have a great impact on the real estate sector, other proposals are those that give tax exemption to individual taxpayers whose annual taxable income is Rs 5 lakh and for a salaried employee from Rs 40,000 in standard deduction amount. There will be an increase of up to Rs 50,000 Profitable investors.

2 lakh or more affordable housing by central government

On 9 April, the Minister of Urban Development and Housing in Ahmedabad M.Venkaiah Naidu has launched around 2.03 lakhs affordable houses at a function organized by CREDAI (Confederation of Real Estate Developers Association of India).

The hard work put in by the Union Government has started showing results in the construction sector. The maximum dwelling unit size will be a carpet area of ​​643 square feet which is equivalent to approximately 900 square feet of built up area.

Getamber Anand, president of CREDAI, and CMD of NCR-based ATS Infrastructure, also said that the association has decided to play a major role in engaging its members for affordable housing projects. He also mentioned that CREDAI intends to work as a nodal agency to avail the benefits announced by the Central Government under the Pradhan Mantri Awas Yojana (PMAY).

Jaxay Shah, MD, Ahmedabad-based Savy Infrastructure, who was appointed as the chairman of CREDAI at the investment function on 9 April, said that with several measures announced by the central and state governments, affordable housing will be the main area in the coming times. “The condition of affordable housing infrastructure would help the developer to get a construction loan at very affordable rates” said by Shah.

A budget of Rs 70,000 crore has been allocated for 375+ new affordable housing projects. Such projects are spread across India, with the development of a total of 60 million sq ft of land and construction of 20.80 crore sq ft, for the construction of a total of 23,000,000+ houses.

On this occasion Jaxay Shah also mentioned that India has registered a shortage of 20 million houses and is an attempt to overcome the housing shortage by placing consumers at the center of all our efforts. "Our 375+ affordable housing projects will fulfill the dreams of millions of Indians who own a house."

On top of that, expanding the 80IB benefit that would make the profits earned by an affordable housing project tax-free would make the cost of affordable housing units very reasonable. The prices of an affordable housing unit will decrease from Rs 12 lakh to Rs 35 lakh depending on location and cities.

A senior official in the ministry said that developers are the second most important stakeholder in the housing sector after the buyer, with the government deciding to rope them in to distribute various benefits to the end users.

Find by price and locality, type: Apartments, Villas, office spaces, shops, builder floors, search by area, price & amenities. choose your residential property from lakh+ property optionas on SuGanta Realty Services llp.

Government approved construction of more than 1.4 lakh houses under Pradhan Mantri Awas Yojana (Urban)

The Center on July approved construction of about 1.4 lakh houses under the Pradhan Mantri Awas Yojana. Permission was granted to construct around 1,40,134 more affordable houses for the benefit of the urban poor, taking the cumulative number of houses to be built under PMAY (U) to more than 85 lakhs.

The Union Housing and Urban Affairs Ministry said in a statement that the approval was given at the 45th meeting of the Central Clearance and Monitoring Committee (CCMC) headed by HAA Secretary Durga Shanker Mishra.

Under the sanctioned houses, Uttar Pradesh was sanctioned 54,277 houses, while West Bengal got approval to construct 26,585 houses, followed by Gujarat (26,183), Assam (9,328), Maharashtra (8,499), Chhattisgarh (6,507), Rajasthan. (4,947) joined. ) And Haryana (3,808) under PMAY (U)

The statement further said that a total of 492 projects would cost Rs 6,642 crore, out of which the Center approved financial assistance of Rs 2,102 crore.

Additional Information about Pradhan Mantri Awas Yojana:

Pradhan Mantri Awas Yojana (PMAY) has been introduced by Prime Minister Narendra Modi on 1 June 2015. PMAY scheme is an ambitious project of PM Narendra Modi. It is provided by the Government of India which intends to provide affordable housing to the urban poor. It aims to provide housing for all by 2022, by which time the nation has completed 75 years of its independence.

Under the scheme, affordable houses will be built in selected cities and towns using environmentally friendly construction techniques to privilege the urban poor population. Further, under the Credit Linked Subsidy Scheme (CLSS), beneficiaries under the PM Awas Yojana are fit for interest subsidy if they take a loan to buy or build a house.

Beneficiaries under the Pradhan Mantri Awas Yojana?

A beneficiary family would include a husband, wife, unmarried son and / or unmarried daughters. The beneficiary family should not keep a pucca house in any part of India in his / her name or in the name of any member of his family.

Identify and Select Beneficiaries under PMAY?

The Pradhan Mantri Awas Yojana (U) scheme mainly caters to the housing demands of the urban poor. The scheme provides housing facilities for people living in limited areas of slums, inefficient infrastructure, poor sanitation and drinking facilities.

The beneficiaries of PMAY (U)?

Mainly consist of Middle Income Group (MIG), Low-Income Group (LIG) and Economically Weaker Section (EWS). While the annual income of EWS category Beneficiaries is more than Rs.3 lakhs, the annual income of LIG and MIG beneficiaries is Rs. Can be between 3-6 lakhs and Rs.6-18 lakhs. While the beneficiaries of the EWS category are eligible for full support under the scheme, the beneficiaries of the LIG and LIG categories are only eligible for the Credit Linked Subsidy Scheme (CLSS) under PMAY.

To be identified as an LIG or EWS beneficiary under the scheme, the applicant is asked to submit an affidavit as income proof to the authority.

The term commercial real estate called investment/income property refers to the buildings or land that is intended to make a profit, either from capital gain or rental income on SuGanta Realty Services llp The commercial real estate in India can be categorized in the industrial property, office buildings, hotels, medical centers, malls, shopping centers, retail stores, farm land, warehouses, multifamily housing buildings & garages. In India, buying power of people has improved due to the growing economic situation of India & which is the best cause of rising demand in property investment. One more cause for increasing in the property-investment-demand is that in the great India, it is regarded as the finest investment since it promises high returns & huge profits.