Effect of Service Tax Increase on Existing Home Loan

POSTED BY Zoeb ON April 21, 2012 7:53 pm COMMENTS (3)

Dear Group Members,

I am quite naive, and probably not well informed, so sorry, if my question appears to silly. I have a existing home loan which is completely disbursed before March 2012. I have read in several news articles that as a result of increase in Service Tax, the Home Loan is going to cost more, I understand for a new loan taker, it will be expensive, but what will be the effect of increase in Service Tax, to an existing home loan taker, whose, loan is completely disbursed?

Regards

Zoeb Lakdawala

3 replies on this article “Effect of Service Tax Increase on Existing Home Loan”

  1. Zoeb says:

    Hello Forum

    one of my friend having a home loan of 30,00,000 lacs did the last disbursement of 3,00,000 lac after 1st april, now his builder says that he has to pay an additional amount as a result of increase in the service tax. My question is that is the builder correct or he is just faking this thing and try to extract extra money from my friend. Also, at the time of registration of the property we have already paid 2.67% service tax, now if the service tax is increase then what is the additional amount one has to pay per lac of its disbursement? Also if it is possible can you provide me a suitable link? Further, if a person has booked his flat in January 2011, and if he has just started paying an EMI of say 25,000/- in the month of April itself for a home loan of 25,00,000 lac, how the increase in service tax hamper his savings?

    Regards

    Zoeb Lakdawala

    1. Dear Zoeb, as the property is already registered before 1st April 2012, the question of paying extra Service Tax does not arise. The builder is making fool of your friend.

      There is no impact of service tax on your regular EMI paid for home loan. The service tax ‘ll come only in the picture, whenever there is a charge or fee applicable to you from your bank.

      Thanks

      Ashal

  2. Dear Zoeb, please feel easy as you are not impacted for that Service Tax thing. The impact of Service Tax increase ‘ll be felt by the persons who are purchasing now. Builders have loaded up that 2% increase in the already paid 10% service tax.

    As your amount has been fully utilized, no reason to worry for you.

    Thanks

    Ashal

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