The (home mortgage loans) Impact of New Tax Code on Real Estate
No commentsBy Real Estates
New Delhi :The revised draft for the Direct Tax Code released on June 15, is currently a hot topic of discussion among people. The code is an attempt by the government to simplify the existing income tax laws in the country. Assuming there are no further roadblocks, the government expects to implement DTC on April 1, 2011, after it is passed by the Parliament.
Here is a list of some of the noteworthy changes proposed in the draft code that will impact the real estate segment. The government has revised the criteria for computing short-term capital gains. According to the proposals, any loss or gain made on the sale of an asset within a year of purchase will be taxed.
The loss or gain made will be factored in your income and taxed according to the income tax slabs of the investor. According to the existing tax laws, sale of asset before three years of purchase is considered short term.
Long-term capital gains- According to the proposed laws, any loss or gain made on the sale of an asset after one year of purchase is liable for long-term capital gains tax. Instead of indexation benefit, the government plans to introduce the concept of discounting based on which LTCG will be calculated. It has also revised the base date for determining the cost of acquisition.
According to the draft code, from April 1, 2011, April 1, 2000 will be considered for calculating the discount rate and not April 1, 1981, which is used currently. This is a good news for investors who have invested in property years ago, as the unrealised capital gains on such assets between April 1981 and April 2000 will not be taxed.
Earlier long-term gains were taxed at a flat rate of 20 per cent after indexing it for inflation. However, now it will be added to your income after indexation (wipe out the rise in property value on account of inflation) and be taxed at the marginal tax rate i.e., the rate will be dependent on the tax bracket you find yourself in.
This change will have a direct bearing on individuals in the higher income bracket as tax outflow will increase. So if you fall in the 30 per cent tax bracket, your gains will be taxed at 30 per cent.
Taxation on rental income- According to the earlier draft, the DTC had proposed that gross rent should be calculated at a presumptive rate of 6 per cent of either the market value or the cost of construction or acquisition, whichever is higher.
However, it has now decided to reinstate it to the actual rent received or receivable for the financial year. Doing away with the complex method of calculation of rent will prove to be beneficial for recent home owners letting out their house.
Interest on home loans- The draft DTC released in August 2009, proposed doing away with the tax deduction on the interest paid on home loans.
But fortunately, the revised DTC intends to continue tax deduction on the interest paid on home loans up to Rs 150,000 for purchase or construction of residential property. This has come as a relief for first time home buyers.
Property not let out- This will be ignored from tax calculations and hence no deduction for taxes or interest will be allowed. Any one house property that has not been let out (treated as self occupied) will be eligible for deduction on account of interest to the tune of Rs 150,000.
Ambiguous areas- The discussion paper does not mention anything about the tax benefits on the principal amount paid on housing loans, while it clearly states that interest paid is deductible up to Rs 150,000. It has also not mentioned anything on the tax treatment of interest during the pre-construction period.
Changes proposed in the revised draft of the Direct Tax Code will cheer home owners and home buyers. While changes like tax deduction on interest paid on home loans and calculation of tax on actual gross rent are favourable for investors, changes in capital gains dampen enthusiasm.
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Acquired land need not be returned
By kuldeep
Mumbai : The state government can use acquired lands for any other purpose if the purpose for which the land was acquired has been achieved, according to Maharashtra government.
The legal heirs of the erstwhile owner of the lands in Dahisar claimed that instead of expanding the existing Remote Receiving Station by the Airports Authority of India, the Mumbai International Airport Private Limited, which subsequently took over airport operations, is planning to use 50 per cent of the land to resettle and rehabilitate people who have encroached upon the airport land.
The affidavit filed by Kishore Agraharkar, special land acquisition officer, states that lands once acquired for a public purpose cannot be returned to original owners.
As per Supreme Court judgment land once acquired for public purpose need not be given back. Its upto the airport authorities to decide what to do with the land, said assistant government pleader G W Mattos.
The legal heirs, reclaiming the two tracts of land measuring 12 acres, stated that the land will be used for rehabilitation of encroachers instead of expanding the RRS as revealed in an earlier affidavit filed by the authorities.
Petitioner Anwar Hajee Cassum Agboatwala and other legal heirs state that such a change of purpose is not permissible even if it is assumed it is for a public purpose.
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Is Taking Out a 2nd Mortgage in CT Ever a Good Idea?
By Bela Kellog
The term 2nd Connecticut mortgage usually refers to more secure loan option available in Connecticut. This particular mortgage option offers you with a loan on your property whereas your home forms the source of collateral. This is strictly in accordance with the terms and conditions set forth by the 2nd Connecticut mortgage that you are highly authentic to re-finance in the event of two situations. This means that you are liable to refinance in case you require some additional credit. Not only this, but refinancing also allows you to make a significant reduction in the monthly payments.
2nd Connecticut mortgage coupled with the feature of refinancing has been termed as a significant option for those individuals or home-owners who are either interested in paying off their mortgages apart from including the Connecticut home equity lines of credit or by making a sound inclusion of home equity lines of credit . This means that you can easily refinance your Connecticut 2nd mortgage in case your credit history is not so perfect but falls in the satisfactory zone.
It has also been recognized that Connecticut 2nd mortgages have been emerged as a brilliant option in case you need an additional credit for paying bills or to cover up the re-modeling requirements. You are also allowed to refinance the Connecticut 2nd mortgage in the event when the rate of interest on the 2nd mortgage considerably exceeds the current rate of interests usually offered by the majority of lenders. In fact there are a lot of lenders who are ready to offer you with a no-obligation quote, in case you are highly interested in refinancing the Connecticut 2nd mortgage.
You can also acquire no-obligation quotes from many different lenders by simply submitting an application. This feature basically aids a lot in considerably making a sound reduction on the inquiries put forward on your credit report history. In most cases, it has been viewed that an individual is allowed to submit his application for getting the quotes, without specifying any sort of initial inquiry put forward on his credit history in the past.
Refinancing the Connecticut 2nd mortgage has also been recognized as a straightforward and a quick process. It also allows you to get multiple no-obligation quotes from different lenders. Besides this the Connecticut 2nd mortgage also guarantees you that you are getting the lowest rate and that too at the best terms and conditions. These reduced interest rates go a long way in saving the credit that you are required to pay every single month.
Another crucial thing that an individual is required to know is the complete information on the different rate options. It is always recommended to do an in-depth survey of the market before opting for a specific refinancing Connecticut 2nd mortgage option.
In short, we can say that this is all that you should know about the 2nd Connecticut mortgages. For more information on them, you can visit the websites listed below, or contact a real estate professional who can tell you what you need.
Bela K. is a writer and contributor to sites including, http://connecticutrealestateadvice.com, and http://cthomesforsale.org
Sunday, August 22nd, 2010 at 11:25 am and is filed under realestate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
