What is Price Protection Policy in Real Estate Market?

You’ve finally decided to buy a home but it is plagued with uncertainties, speculation, opinions and uncalled for advice. Relatable, isn’t it? That’s because a home is possibly the biggest purchase in one’s life.

Needless to say, there’s a plethora of doubts and fears in your mind before you finalize on anything. You might take into account about the location, the market reputation of the builder, the size, and the amenities but it all boils down to 1 simple question: is your investment safe? More so in today’s financial scenario where the markets are weighed down by demonetization, slow down and the anticipation for real estate prices to fall further.

The Price Protection Policy comes in as a savior in such times; especially for those who are sitting on the fence still wondering whether to buy or not. Price Protection Policy is a solution to all your worries and has the power to instill confidence in both the buyers’ as well as the builders’ minds.

“You had my curiosity, but now have my attention”.

So what exactly is Price Protection Policy?

From the clothing industry to the automobile industry, brands use ‘cashback’ to retain their customers’ interest.

In the realty market, Price Protection Policy is that ‘cashback’ which helps us retain your confidence. It protects your investment from fluctuating prices such that, if the price of the property you’ve bought falls, the builders, refund you the difference.

price-protection-policy_loanyantra-comFor instance, if you buy a home for say, 80 lakhs, and due to market movements it drops to 75 lakhs, the builder will refund you the difference, i.e. 5 lakhs, under the Price Protection Policy, NO QUESTIONS ASKED!

Isn’t that so assuring and relieving?

But it’s important to note that the price protection window might differ from builder-to-builder. That means each builder might offer a different time frame to cover your properties under Price Protection. Usually the builder offers it till the buyer takes the possession.

How does the Price protection policy benefit the home buyer?

Price protection policy is first implemented in 2008 by a renowned builder Rohan Builders for their projects in Pune. This was done in the wake of global economic recession and real-estate crisis that crippled nations and organizations worldwide. As was mentioned in the property agreements, the difference was actually refunded to the customers.

It is a safety net for one’s life savings. In a market so volatile that even vegetable prices keep changing week-on-week, one is wary about parking lakhs or even crores of rupees in an asset like home if it’s their necessity. The Price Protection Policy alleviates that fear and instills confidence.

The realty market is betting big on this new policy. Make sure that you not  only have a verbal commitment but also make the builder mention in the document.

Be optimistic to get something tangible and legal to hold on to when you buy your dream home from your builder.  There are many known builders who follow this policy. Find out from your builder if he follows the policy. We only hope that every realtor follows for the betterment of the overall realty market.

Price protection policy followers

Pethkar Projects’ Seyona at Punawale is offering Property Rate Protection Policy from the day project was launched in 2014. Some of the followers of the price protection policy are Concord Builders, Tata Homes, Mahaveer Group, Runnal Group, Lodha Group, Oyster Living, Citrus Ventures. These developers had started implementing the policy post demonitization to bring back the boom in the realty market.

The purpose of the policy is in the interest of the home buyers not loosing their hard-earned money during the post demonetization when the realty market was going low. But with the decrease of home loan interest rates, the real estate market had become a hit again.


Capital Gains Tax

What is Capital Gains Tax?

The taxation system in India is intricate and many a time complex to understand. Capital Gains Tax is an important aspect in Taxation. Here we go through an important part of Indian taxation system on the capital gains. Let us first understand what capital gains is and what the different implications of a tax on it are.

Firstly, Capital Gains is the profit which one earns during the sale of the capital asset. So, Capital gains tax is the tax levied on the profit after the sale of the asset. Capital gains tax is levied in the same year in which the transfer of capital assets takes place.

Capital gains tax is not applicable on assets which are inherited. As per the Income Tax Act of India, assets which are exempted from tax slab include gifts which are inherited or are transferred via will.

What all comes under capital asset?

Some of the common inclusions in the list of capital assets include the following:

  • Land
  • House
  • Building
  • Machinery
  • Jewelry
  • Trademarks 
  • Vehicles
  • Patent
  • Leasehold rights

The following assets do not fall into the category of capital assets:

  • Any kind of stocks, raw material or consumables which are held for business purpose or profession.
  • Agricultural land in rural area
  • Personal goods like furniture, clothes etc. which are held for personal usage
  • The following are not considered capital assets:
  • Gold bonds
  • Special Bearer Bonds 1991
  • Gold Deposit Bond issued under the Gold Deposit Scheme, 1999

What is the difference between long term and short term asset in  capital gain taxation. Long-term capital assets are those which are held for a period longer than 36 months whereas the short-term capital assets are held for 36 months or less.

Another important point of consideration that one need to take care of is the holding period which is applicable to the particular assets held by the person. In certain assets, the holding period is more than 12 months but still, they are considered as part of the long-term asset.  This rule comes into picture if the asset has been transferred after 10th July 2014 (date of purchase stands irrelevant).

The following assets when held for a period more than 12 months are considered to be long term capital assets:

  • Equity or preference share (of company sites in stock exchange of India)
  • Units of UTI
  • Securities like bonds, government securities, debentures etc.
  • Zero coupon code
  • Units of equity oriented mutual funds

Calculation of Capital Gains:

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Tax on long-term capital gain: It is taxable at 20% + surcharge and education cess.

Tax on short-term capital gain: In the case of securities, transaction tax is applicable, then tax applicable is at the rate of 15%+surcharge and education cess.

Calculation of Capital Gains:

Short-term capital gain = Full value consideration- (cost of acquisition + cost of improvement + cost of transfer)

Long-term capital gain = Full value of the consideration received or accruing – (indexed cost of acquisition + indexed cost of improvement + cost of transfer). Where;

Indexed cost of acquisition = Cost of acquisition X cost inflation index of the year of transfer/ cost inflation index of the year of acquisition

Indexed cost of improvement = cost of improvement X cost inflation index of the year of transfer/cost inflation index of the year of improvement

The cost of transfer is a brokerage paid for arranging the deal, legal expenses incurred, the cost of advertising, etc.

Capital gains tax. Do not miss this.

Advantages of capital gain tax

  • The tax payments differ till the time assets are sold. Security investor doesn’t have to pay tax on profits earned from bonds and stocks till the time he/she sells the assets.
  • Tax rates on long-term capital gains are lesser than normal income tax rate.
  • Capital gains rate does not apply to inventory, even if this asset is held by you for more than one year.
  • As per the Section 54 and Section 54F of the Income Tax Act, there is a provision wherein long-term capital gains can be used to construct or acquire resin details house property if, conditions like time frame within which the gain must be invested for buying or constructing property, then the person is exempted from capital gain tax.

Loanyantra stands with you if you look for investing your capital gains in a property. It helps you for a easy and hassle-free home loan process and management.

It is always advisable to take expert advice how to invest and where to invest before selling the assets.

Home Buying Tips for Women

Buying a home today takes a certain confidence – in the market and in your own financial strength. A lot of single, female homebuyers are taking that bold step in high heels, with no one at their side.

By educating and empowering themselves, single women have acquired a sense of  home-buying confidence, making the dream of home ownership a reality. It’s a process that doesn’t necessarily begin with love first—unless it’s for her dream house. She just needs a good real estate agent, an educated understanding of navigating the home-buying process, and a happy and pleasant mood to celebrate after signing on the 50,000 dotted lines at closing.

Not just the single woman, a married woman too, apart from being an earning member, also has a complete grasp of the family’s current and future financial abilities. Developers are aware that they play a role in a family’s homwomen tips _ loanyantrae purchase decisions. A woman has a better perspective about what should be included or excluded. Still, buying a home is not just a matter of instincts and good taste, but also one for adequate planning and foresight.

For women who are investigating the market for suitable properties, either for themselves or for their family, here are some points to consider.

  • Be realistic, stay focused

Home ownership is a great move for a woman and a step towards independence in her retirement years. But your first home is not necessarily the only home you will ever buy. Remember that you can always upgrade in the future if required, so there is absolutely no need to buy the biggest-possible flat now. So try not to compromise your current financial viability by buying a needlessly expensive home.

The home you live in today does not have to be the one you will be living in when you retire. When it comes to real estate, it is always a good thing to upgrade as financial ability improves, but this process can and should be planned out over the entire course of one’s working life. For a woman who is at the outset of her career, nothing is more important than financial stability on every front.

To plan for upgrading to a bigger and better home further down the line, it is advisable to invest (and stay invested) in good mutual funds which deliver more women home buying_loanyantrareturns than savings accounts. Direct stock market speculation into single company stocks and bonds as a potential source of real estate funding should be avoided; as such investments are not sufficiently diversified to offer a safety net in case a company experiences a downturn.

  • Shop aggressively for financing

The home loan market in India is currently very competitive, and banks are falling over themselves to attract customers. Make specific inquiries about special interest rates and other incentives that a bank is offering women borrowers (usually 0.05% lesser than the prevailing interest rate). Never take the first thing that is offered to you — most banks have a considerable margin of flexibility to accommodate borrowers who know what they want and are determined to get it.

Check rates with several mortgage lenders, and don’t simply select a lender based on a recommendation from a friend or a realtor.

  • Don’t stretch your budget too far

First figure out the monthly mortgage and whether they will be able to afford it. Online mortgage calculators can be helpful, but they tell you the value of the principal and associated interests. There are other monthly expenses involved in home ownership, and these include insurances, taxes, maintenance charges and utilities charges.

For working, single women, it is important that all these amounts put together do not exceed 35-40 per cent of their net income. Keep in mind that property is not the only investment you should make towards your ongoing financial security. You should also set aside at least 10 per cent of your monthly income into a retirement plan.

When it comes to home purchase, every financial angle must be examined well in advance. It is advisable to use the services of an experienced financial planner. The process of buying a dream home should not turn into an unexpected nightmare at any point.

Those who are just starting out in their careers should not allow themselves to fall too deep into a credit trap. It is always best to use free and clear capital as far as possible.

Make sure the developer has a strong reputation in the market by doing multiple checks. It is highly advisable to patronise only established developers with a readily verifiable track record for timely completions and 100 per cent adherence to the agreements they make with their customers.

e-Filing of Income Tax – Forms, Methods and Types

The below are three options to file Income Tax Returns electronically:

Option 1: e-File without Digital Signature Certificate. In this case an ITR-V Form is generated. The Form should be printed, signed and submitted to CPC, Bangalore, using Ordinary Post or Speed Post ONLY within 120 days from the date of e-Filing. There is no further action needed, if ITR-V Form is submitted.

Option 2: e-File the Income Tax Return (ITR-V) through an e-Return Intermediary (ERI) with or without Digital Signature Certificate (DSC).

Option 3: Use Digital Signature Certificate (DSC) / EVC to e-File. There is no further action needed, if filed with a DSC / EVC.

Note: The Digital Signature Certificate (DSC) used in e-Filing the Income Tax Return/Forms should be registered on e-Filing application.


Pre-requisite for registration in e-Filing application

A user must register at www.incometaxindiaefiling.gov.in

Pre-requisites to register

1) PAN (Permanent Account Number)

2) TAN (Tax Deduction Account Number)

3) Membership with ICAI – For Chartered Accountant

Registration process

1) Provide PAN / TAN, Password details, Personal details as per PAN / TAN, Contact details and Digital signature (if available and applicable)

2) Submit request

3) On success, Activation link is sent to user through e-mail and a mobile PIN to mobile number. Click on the activation link and provide Mobile PIN to activate e-Filing account.

Once registered, LOGIN using User ID (PAN/TAN), Password, Date of Birth/ Incorporation and Captcha code.

Methods of e-Filing of Income Tax

1) Preparing the Income Tax return off-line using return preparation software, available free of cost at the Income Tax Department e-Filing website and Uploading the Income Tax Return data.

A taxpayer can e-File Income Tax Return from ITR 1 to ITR 7.

2) Submit ITR-1/ITR4S Online– An Individual taxpayer can prepare and submit Income Tax Return- ITR 1/ITR4S-Online.

e-Filing of Income Tax Returns (Offline)


Steps to download utility and generate XML

Excel Utility – 

1) www.incometaxindiaefiling.gov.in e-Filing Home Page
2) Click on the “ITR” under “Downloads”
3) Click on “Download” link and save the ZIP file (Excel or JAVA utility)
4) Extract the downloaded ZIP File
5) Open the utility, Click on “Import Personal / Tax details from XML” –>Browse and attached the downloaded Prefill XML file to populate the personal information and TDS details.
6)  Enter all the Mandatory Fields –> Validate all the sheets –> Calculate Tax –> Generate XML.
7) Login using e-Filing user credentials
8) Navigate to “e-File” Tab –> Click on“Upload Return”
Select “ITR Form Name” and “Assessment Year” from the dropdown provided.
10) Browse and attach XML file.
11) Select “Do you want to digitally sign?”–>
12) On successful submit taxpayer will get an option to e-verify return.

JAVA Utility –

1) www.incometaxindiaefiling.gov.in e-Filing Home Page
2) Click on the “ITR” under “Downloads”
3) Click on “Download” link and save the ZIP file (Excel or JAVA utility)
4) Extract the downloaded ZIP File
5) Open the utility, Click on “Prefill” –>Enter “UserId”, Password, “DOB/DOI” and select “Prefill Address”(From PAN Details, From previous ITR Form Filed, None) –> click Prefill
6) Enter all the Mandatory Fields –> Calculate Tax –> save XML.
7) Click on “Submit” –>Enter “Password” and select “Do you want to digitally sign?” –>Submit

Process and Submission of ITR1/ITR 4S Online

The taxpayer has the option of submitting ITR 1/ITR 4S by way of Uploading XML OR by Online submission


Steps to e-File Online ITR (ITR 1 and ITR 4S) – 

1)  www.incometaxindiaefiling.gov.in e-Filing Home Page
2) Login using e-Filing user credentials
3) Navigate to “e-File” Tab –> Click on “Prepare and Submit Online ITR”
4) Select “ITR Form Name” from the drop down (ITR-1 or ITR-4S)
5) Select “Assessment Year” –> Select the Radio button “Prefill Address with” to auto populate the address –> Select the Radio button if DSC is applicable –> Click on “Submit”
Enter the mandatory details in the online form –> Click on “Submit”

To e-File using DSC, it should be registered in the e-Filing application.
2) If the Income Tax Return is digitally signed or electronically verified, on generation of “Acknowledgement” the Return Filing process is complete. The return will be further processed and the Assessee will be notified accordingly. Please check your emails on these notifications
3) If the return is not e-Filed with a DSC (digitally signed) or EVC (electronically verified), an ITR-V Form will be generated. This is an Acknowledgement cum Verification form. A duly verified ITR-V form should be signed and submitted to CPC, Post Bag No. 1, Electronic City Post Office, Bangalore – 560100 by Ordinary Post or Speed Post (without Acknowledgment) ONLY, within 120 days from the date of e-Filing.
4) On receipt of the ITR-V at CPC, the return will be further processed and the Assessee will be notified accordingly.

Register Digital Signature Certificate (DSC):

Follow the below steps to register DSC in e-Filing of income tax

1) www.incometaxindiaefiling.gov.in e-Filing Home Page
2) Login with e-Filing user id and credentials
3) Navigate to “Profile Setting” Tab –> Click on “Register Digital Signature Certificate”
Download “ITD e-Filing DSC Management Utility” from the link provided in e-Filing website Extract the downloaded DSC Utility –> Open the Executable Jar File (DSC Utility)
5) “Register/Reset Password using DSC” – tab
6) Enter e-Filing User ID, Enter PAN of the DSC, Select the type of DSC
7) DSC using .pfx file
8) Select the Type of DSC .pfx file
Browse and attach the Keystore file (.pfx File)
10) Enter the password for your private key
11) Click on “Generate Signature file”
12) DSC using USB token
13) Select the Type of DSC (.pfx file or USB token) USB Token
14) Select USB Token Certificate –> Click on “Generate Signature File”
15) Browse and attach the signature file using the browse option –> “Submit”,

Modes of e-Verification

The below are the options provided to electronically verify the returns
Option 1: e-Verification using e-Filing OTP (only available if Total Income is less than or equal to Rupees 5 Lakhs and Refund or Tax payable upto 100 Rupees.
Option 2: e-Verification using NetBanking login
Option 3: e-Verification using Aadhaar OTP validation.
Option 4: e-Verification using Bank ATM (SBI)
Option 5: e-Verification using Bank Account Number (PNB)
Option 6: e-Verification using Demat Account

Note: No Further actions required by the taxpayer post e-Verifying the Return

Upload of Income Tax Form (Other than Income Tax Returns) by Tax Professional

Steps to e-file Audit Form(CA):
1) The taxpayer (Client) has to add a particular CA for upload of particular audit form. Post which, the CA has to login into his account and download required Audit Form. After updating, the CA has to upload the Audit form using CA login.

Add CA functionality:
1) www.incometaxindiaefiling.gov.in
– e-Filing Home Page
2) Login with efiling user credential.
3) Navigate to “My Account” –> “Add CA” –> Enter “Membership Number”, “Name of the CA”, select “Form Name” ,“Assessment Year” –> click “Submit” to add CA.

efiling-of-income-tax_loanyantraE-file Audit Form:
1) www.incometaxindiaefiling.gov.in – e-Filing Home Page
2) Login with CA credential.
3) Navigate to “e-File” –> “Upload Form”
Enter “PAN/TAN” of the Taxpayer, “PAN of the CA”, Form Name, “Assessment Year”, Filing Type, “Attach the XML” , “Attach Signature File” and click on submit.

A request will be sent to Taxpayer of such upload done by the CA. The taxpayer can view the same under “Work List” option after login with taxpayer’s login credentials.

Approve Audit Form:
1) www.incometaxindiaefiling.gov.in – e-Filing Home Page
2) Login with user Credential.
3) Navigate to “Worklist” –> “For your Action” –> “Click on “Click Here” for view Uploaded Form Details
4) Click on “View Form” –> select “Approve/Reject” –> enter “Rejection comment” –> click on “Submit”

Once assesse approves the audit form it will be considered for processing. In case of rejection, CA has to upload the audit form again after making necessary changes.

Submit Online Form:
1) www.incometaxindiaefiling.gov.in
– e-Filing Home Page
2) Login with e-Filing User credential.
3) Navigate to “e-file” –> “Prepare submit Online Form (Other than ITR)” –> Select the “Form Name” and “Assessment Year”
Click on “Continue” to proceed further.

Stay digitalised and connected. Happy Tax Saving Month.

Snippets On Home Loan Tax Benefits!

Must know things about home loan tax benefits!

home loan tax benefits
Home loan tax  benefit classes 🙂
  • Home loan borrowers are entitled to tax benefits under Section 80C and Section 24 of the Income Tax Act. These can be claimed by the property’s owner.
  • In the case of co-owners, all are entitled to tax benefits provided they are co-borrowers for the home loan too. The limit applies to each co-owner.
  • A co-owner, who is not a co-borrower, is not entitled to tax benefits. Similarly, a co-borrower, who is not a co-owner, cannot claim benefits. Which means, to claim tax on property, the person should be both co-borrower and co-owner.
  • The tax benefit is shared by each joint owner in proportion to his share in the home loan. It’s important to establish the share for each co-borrower to claim tax benefits. 
  • The certificate issued by the housing loan company, showing the split between principal and interest for the EMIs paid, is required for claiming tax benefits. 

If You Work for a company –

  • Submit your home loan interest certificate to your employer for him to adjust tax deductions at source accordingly. This document contains information on your ownership share, borrower details and EMI payments split into interest and principal.

If You Are Self-employed and a Freelancer –

  • You don’t have to submit these documents anywhere, not even to the I-T Department. You’ll need them to calculate your advance tax liability for every quarter. You must keep them safely to answer queries that may arise from the I-T Department and for your own records.

If you have another property along with your self-occupied house, and if you let-out that property, you can claim tax deduction for the entire interest amount on the let-out home’s loan. So, the income from that property is calculated from deducting the property tax, standard tax deduction (30%), interest on the let-out property home loan from the annual rental value of the let-out property.

For the first time home buyers, the government provides up to Rs 50,000 tax benefit on loan up to Rs 35 lakh taken for residential house.

There are more tax planning benefits by different investment opportunities. Explore and take expert’s advice for the best decision and for saving more.