Home Finance: Spouse can’t get Pradhan Mantri Awas Yojana subsidy if you have taken the subsidy earlier

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Q1. Last year we bought a house in my mother’s name and got PMAY subsidy on home loan taken jointly be me and my father and mother. I got married recently and my query is can I buy a house in my or my wife’s name and get PMAY subsidy? – Prakash Sharma

Your wife will not be able to avail the PMAY subsidy as you have already availed the scheme for buying the property in your mother’s name. PMAY subsidy is applicable for first-time home buyers, who will be the end users. Since you have already availed the PMAY subsidy while applying for a home loan along with your parents, you will not be eligible for it any longer.

Q2. If I buy my mother’s flat by taking loan from a bank, do I have to do an agreement to sale, pay the stamp duty and also deduct 1% TDS before giving the money to my mother? —Sangeeta S

Very few lenders permit financial transactions within the family as it indicates raising money within the family. In your case, lenders may also seek guarantee from you on your mother’s accommodation. You could get a registered sale transfer deed and intend to do a bonafide transaction to raise a home loan from your lender. Alternatively, you could opt for loan against property wherein your mother can be the applicant and you along with other legal heirs can be co-applicants. For a complete, legal property purchase, it is vital to follow the necessary processes and obtain key property documents such as letter of allotment, sale deed, sanctioned plan, society documents, encumbrance certificate, sale agreement, etc. Stamp duty is a compulsory tax on the transfer of property rights and 1% TDS is compulsory for immovable property worth Rs 50 lakh or more.

Q3. I have seven years left to repay my home loan. Does it make sense to repay the whole amount or wait till the end to get income tax benefit? —C L Prasad

The concept of repaying the home loan before the completion of tenure is called prepayment. Most financial institutions allow prepayment in part or full. You may avail a tax benefit up to Rs 1.5 lakh on the principal and up to `2 lakh on the interest component. As a recommendation, do not exhaust your entire savings or retirement fund in prepaying your home loan as it may be required in case of a medical emergency or an exigency.