Houses for army officers

Is return from Real Estate really that high-humfauji.in

Is return from Real Estate really that high

Over the last ten years, real estate in India has given good returns. Enticed with the idea of owning a house and seeing their assets rapidly appreciate in value, countless Indians have invested a large part of their savings in real estate. Many cities and suburbs have seen a veritable real estate boom in the last decade. While some investors had bad experience with their real investment due to delayed possession, stalled projects and in some cases the projects never taking off, nevertheless, many investors got excellent returns from their real estate investments. However, there is a big difference between the real returns from real estate and what is apparent. Let us take the case of Akash, a resident of Gurgaon, a New Delhi suburb. Akash purchased an apartment 10 years back for Rs 40 lakhs. The market valuation of his apartment today is Rs 1.5 crores. So Akash’s profit ...
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Would REITs make investing in real estate easy for you- humfauji.in

Would REITs make investing in real estate easy for you?

(Courtesy: Personalfn.com/knowledge-center; dated 14 Oct 2013) Demand in the real estate sector has been sagging due to economic slowdown. Since many people are deferring their property purchases; inventory level in major property markets is rising. It is often found that due to higher ticket size, many find it difficult to buy properties. On the other hand, real estate developers have been knocked down by higher cost of borrowing due to which many projects have gotten stalled. To increase the investor-base and open up another financing avenue for real estate developers, Securities and Exchange Board of India (SEBI) has been considering allowing Real Estate Investment Trusts (REITs) in India. The initial draft was launched in 2008 but was subsequently withdrawn too due to non-transparent valuation norms, dissimilar stamp duty structure across different states and the lack of uniformity in land and property pricing. Recently SEBI has revived the plan by issuing ...
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Take a home loan intelligently!- humfauji.in

Take a home loan intelligently!

The old perspective that one should never get into debt has changed now. It is not because of ‘enjoy today, pay later’ tendency of the current generation, but because changing financial dynamics demand so. This is more so in case of home loans. A Home loan is taken for an appreciating asset, that is a house, which is a part of prudent financial planning. This is opposed to a loan taken for a depreciating asset like an automobile, holidays, white goods etc where the aim is to meet an immediate requirement (real or perceived!). In addition to creating a financial asset, the tax breaks given for home loans for houses could be the biggest tax exemptions you could ever get under the current tax laws, making the effective rate of interest paid by you much lesser than the one contracted for on your home loan. However, there should be no ...
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Unexpected Windfall by Income Tax Tribunal for Sellers of House Property

Unexpected Windfall by Income Tax Tribunal for Sellers of House Property

On 31 October 2012, the Income Tax Appellate Tribunal (ITAT) delivered an order that is set to bring an unexpected relief to millions of home buyers in the country. It clarified that the interest paid on home loans is an expense to the home buyers and hence is to be counted as a cost to them. Thus, when they sell the house, the capital gains on its sale will be the sale price less the purchase cost and all the interest that they paid on its home loan, if availed of. So far, capital gains on the sale of a house were its sale price less the purchase price. The only relief available was for LTCG (long-term capital gains) (ie, if the house was held for at least 3 years after its possession) where the cost of purchase and its improvement could be indexed to the CII (Cost Inflation Index) ...
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Taxation of House Rent Allowance (HRA)

Taxation of House Rent Allowance (HRA)

We often come across people who consider HRA as the amount which is given in-lieu of accommodation and hence fully exempt from tax. There are an equal number of people who consider it as fully taxable – hence, if they get, say, Rs 20,000 as HRA per month, they consider that they are effectively getting only Rs 14,000 if they are in 30% tax bracket. None of the above is actually true, as explained below. HRA is the amount paid by the employer to an employee as a part of the salary package. HRA is given to meet the cost of rented accommodation taken by the employee for his stay. A person can claim exemption on his house rent allowance (HRA) under the Income Tax Act if he stays in a rented house. The exemption of HRA is covered under Section 10 (13A) of the Income Tax Act and Rule ...
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What are your options in this increasing EMI scenario of your home & other loans?

What are your options in this increasing EMI scenario of your home & other loans?

Maj Manish is a 30 year old officer and his family includes his wife (homemaker), 3 year old daughter, and retired parents. Manish had taken a home loan of Rs 25 lakhs one year back at 8.5% for 20 years with a monthly EMI of Rs. 21696. Apart from repaying the home loan, Manish’s other goals include planning for his daughter’s education, marriage and his own retirement. However, his entire planning is going haywire with his borrowing bank raising his Equated Monthly Instalments (EMIs) frequently ever since he has taken the loan. In one year the interest rate on Manish’s home loan has increased from 8.5% to 10%. The EMI has shot up from Rs 21,696 to Rs 24,043 and the outstanding balance is Rs 24.50 lakhs. Against the original total interest outgo of Rs 13,67,754, now the total interest outgo on the loan in the next 19 years will ...
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