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- Originally Posted by sindabadMy father had bought a home far too away from city way back in 1990. That area has developed now though definitely not within city still.
We recently constructed another floor as we had FSI left. All the sanctinos etc were followed and everything is clear on paper. Even we are paying municipal dues as per new sq ft.
The location is as such prime within the area with bus stop just 10 ft away.
Ok. No issues till here.
I came across a project in the city by a very very reputed builder. This is what I exactly wanted, single bulding project with cosmopolitan community.
He is quoting rate of 3300 Rs/sq ft. He is renowned for not negtiating but delivering really good homes.
Since the budget would be close to 55-60 lac (1700-1800 sq ft), I was wondering if my father could sell the earlier home and then buy this on his name with top up from me (about 15-20 Lac with society loan)
Yes, no probs here too. Now, you need to consult your CA with regards your liability for the same. Also check whether making EMIs from your end will be better or giving loan to your dad & then your dad giving this amount as EMIs will be beneficial in your case. And yes, by loan to your dad means you can take interest as little as Re.1/-, call it soft loan. You can also stand as guarantor by pledging your existing flat in which you are living.
Currently my father is staying with me in a plush apartment within city bought on my name. This will be mere investment purpose.
If you find that the current apartment if sold or on rent fetches 6% of its value/annum, use this money as Downpayment or to service EMIs for new flat respectively.
I need forums opinion whether it is worth?
If you have your finances right, then the issue remains only of use. If you are going to use this flat for self use, go ahead, if just as investment, then it is of no use as you already have one. Also, investing should not be done by taking loans......RE is such a place where only surplus money should be parked.How much tax would my father incur in the whole deal? Just from duties paid view point is it worth?
Capital tax gains tax will need to be paid at 20% in your case, but if you are going to put this money is new flat within 2 years & the price of the new house is more than current one, then you need not pay any tax.Any advantages of indexation to him.
If EMIs are paid be him, he will get tax benefits of 1.5L/annum.
As it is seen that you already have a flat in your name & therefore, you will not be able to get this 1.5L tax benefit as it is applicable only on SINGLE house. Hence, it is better if the EMIs are paid by your dad, you being the guarantor so that your dad will get these benefits.
And he being your dad, you can gift him whatever you like & there is no tax on these things :). So, give your dad 10L or 10 Cr & your dad need not pay a single rupee as tax on it.
** Please note that this facility is available only for immediate family members....so gifting anything to your GF will be applicable for tax :D. To avoid such tax, make her wife first ;).
The mentioned property is in my hometown, Kolhapur, however I am discussing it here as I am really impressed with the knowledge forum has.
Thanks & your are most welcome man.CommentQuote0Flag