POSTED BY June 17, 2014 6:47 pm COMMENTS (2)ON
Due to a sudden inheritance, I have come into some money which I would like to invest in a property in Bangalore. The amount of inheritance is equal to amount of the property minus 10 lacs.
I will also mindfully invest a portion of my salary in a FD so that it appreciates marginally and I will have the 10lac rupees needed to cover the home cost. The property is scheduled for possession only after 30 months. So I will invest all the money I have into a home without the burden of any loans.
I will pay some money towards deposit etc and invest the rest in a diversified plan. I will take a home loan for 15 lacs [ full re-payment is: 23 lacs appx] and get some tax benefit on 80C and interest taken on home loan.
I dislike loans, credit cards and anything to do with lending. If it was possible I would save principle and only then buy what I want. I fall in the 20% tax bracket as on today.
Considering the speculation that govt is deciding to make till 5lacs income non-taxable, is it prudent to go for a home loan ?
Will I make so much return on the diversified plan that it warrants taking a home loan ? Interest component of home loan anyways goes down from year one onwards, therefore that means that you can’t even claim full 1.5lacs exemption for tax benefit. And in 80C you already have PF, Medical Insurance, Life Insurance, RGESS etc so tax benefit on principle amount of home loan is also less.
My consensus is that Home Loan is a waste of time & energy but I want to ask you for your opinion also so I can convince my CA 🙂