How to Select an appropriate Lender/Loan amount for a Housing Loan

 

The dream of owning a house is very close to every person’s heart who does not own a house. Buying a house is besieged with many problems; the most bothering is raising the fund. When we consider various options, loan from banks and housing companies will be our first choice. Utmost care and proper planning with lot of foresight are required before taking the decision as it has a lot of implications on your financial position for many years.

While deciding the lender, type of housing loan and amount of loan, one should bear the following factors in mind:

1. Rate of Interest.

2. Type of variability in Rate of Interest (Interest Fixed for the entire tenure (Fixed), Floating Interest rate (Floating), Variable after certain number of years (Reset)).

3. Conversion Fee (Fee for converting your loan a/c from any of the option of Fixed, Floating, Reset  to any one of them)

4. Method of Calculation of interest (a. Flat – on entire loan amt till the loan is repaid, b. Reducing Balance on daily balance, c. Reducing Balance on Monthly Opening balance. This affects the amt of EMI).

5. Margin Money (the applicant’s contribution in purchase price of the house, also called Loan to Value Ratio or Down payment, stated in percentage - %).

6. Borrowing Cost - Fees/Charges/Cost payable upfront (before the loan is sanctioned) in the form of Processing Fee, Inspection Fee, etc.

7. Fees/Charges/Cost payable during the tenure of loan.

8. Penal Interest and other penalty and the occasions/events when the  penalty will be levied.

9. Foreclosure Fee (Charges payable if you want to repay all the loan amt before the due date of repaying/settling  the entire loan)

10. Balance Transfer Fee (fee if you want to transfer your loan a/c from present lender to another lender)

11. Length of  Tenure (The numbers of years within which you have to repay the entire loan). Longer the tenure, smaller the EMI. This will help obtain higher loan amt.

12. Availability of  Top – up Loan Facility (which entitles you to avail more loan on the same property after certain years  for approved purposes)

13. Availability of Interest Subsidy/Subvention, if any

14. Reduction in Income Tax Liability, thereby increasing your income and capacity to repay the loan. 

15. Moratorium period (the period after which the repayment will start after release [disbursement]of the loan).

16. Availability of “Telescopic Repayment Schedule” (wherein EMI will  gradually increase as the years pass by which facilitates sanction of higher loan – more suitable to young applicants)

17. Cost of Insurance (Insurance of the property and insurance, if insisted by the bank, of the applicant.

18. Whether your good  Credit Score/ CIBIL (Credit Information Bureau India  Limited) Report will help you to reduce your requirement of documents/ interest rate/ negotiate with the banker.

19. Bank’s past record in passing on the benefit of reduction in interest rate to the borrowers (warranted by market conditions or RBI instructions)

20. The above factors consider “loaning” or “financial aspects” only. Non-financial aspects are also equally important.

 

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GST Rules & Regulations

HIGHLIGHTS OF GST

(Please refer the GST Act / Rules framed hereunder, CBEC website and other resources for details)

1	Launched w.e.f. 1st July, 2017
2	It subsumes (replaces) various types of about 17 different types of Central and State Taxes e.g. Excise Duty, Service Tax, Special Additional Duty of Customs, Countervailing Duty, etc (Central Govt taxes) and also Value Added Tax or Sales Tax, Entertainment Tax, (excluding the tax charged by the local bodies), Entry and Octroi Tax, Central Sales Tax (taxed by the Centre and collected by the State Government), Purchase Tax, Luxury Tax, Taxes on Lottery, etc (State Govt Taxes).
3	GST is a destination based consumption tax, which essentially implies that the revenue will accrue to the State where the consumer resides. This is unlike the present origin based levy where the revenue accrues to the origin state from where the movement originates.
4	If the aggregate turnover of any person 20 Lakh, it is compulsory to take the registration for him. In case of hilly states (North East States), this limit is more than Rs. 10 lakhs.
5	Except NRI, PANCARD is required for registration. The GST Registration number is consisting of 15 digits, which includes State code and PANcard Number.
6	A Goods and Services Tax Council is formed to solve the policy level issues of under GST regime. The Council is headed by the Honourable Finance Minister.
7	There 3 types of GST will be levied: On Interstate transactions : Integrated GST (IGST) On Intrastate transactions CGST and SGST will be levied (UTGST will be levied on Union territory transactions)
8	Tax rates: 0%, 3%, 5%, 12%, 18% and 28%
9	Registered taxable person will get Input Tax Credit (ITC) of tax paid on Input goods, input services and capital goods.
10	Petroleum products like petroleum crude, motor spirit (commonly known as petrol), natural gas, Aviation turbine Fuel, tobacco products, alcohol are temporarily out of the ambit of GST.
11	If goods or services purchased from unregistered dealer, GST is to be paid by Reverse charge Mechanism (the purchaser has to pay the GST to Govt or Tax Liability will be increased).
12	Though invoices/bills can be raised manually, Returns are to be filed “on line”.
13	1 per cent Tax Collected at Source (TCS) rate for e-commerce (online suppliers) players will be levied
14	Govt has set up necessary system based on Information Technology for Registration, Filing of Returns, Maintenance of Ledgers, Matching of Supplier’s / Purchaser’s Invoices, etc. This is popularly known as GSTN (a Special Purpose Vehicle).
15	Taxpayers who earn turnover of a financial year approximately are less than Rs. 75 Lakh can opt for “Composition Scheme” which provides for easier compliance norms for the suppliers. Service Sector (except hoteliers) is not eligible for this scheme. As per the provisions of Composition Scheme, manufacturer will have to pay 2% GST,  Retailers will have to pay 1% GST and hoteliers will have to pay 5% GST.
16	GSTN has engaged about 34 GST Suvidha Providers – GSP (entities from private sector) to provide services to tax payers. These GSP have, in turn, engaged Application Services Providers (ASPs) to provide services to tax payers. For Tax payers, the ASP and GSP will be the link to upload the returns on GSTN.
17	GST is hailed as a landmark tax reformation in the country leading to smoother movement of goods and services across the nation.

 

Find Total GST Solution & Consultation:- 

GUJARAT INFOTECH LTD, “JAMSAB” A/2, JAY TOWER, 

ANKUR COMPLEX, NR. ANKUR BUS STOP, NARANPURA, AHMEDABAD-380013.

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Phone: 079-27485109, 27452276 

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