Housing Loan Repayment Techniques

[Slayer]

If you can maintain it long term.. yes.. bcoz if u switch jobs they stop all salary account benefits and then they will need different MAB requirements.. Short term needs. don't bother.. you can apply for any product without having a salary account as well

Have planned to go for higher studies after 2 years so i think i got my answer

 

[Dhruvit.SDhruvit.S is verified member.]

Personally speaking, Housing Loan is the cheapest loan one gets.

We Indians are petrified of INTEREST cos are dada, pardadas have seen zamindari system and fall prey to it as interest rates were as high as 4-8% per month.

So the saying, Jitni chaddar utne hi pair failao.

But off lately, i would only suggest to use this interest portion to set off against 80C and 2L additional exemption.

Now i can suggest you a trick where all interest gets exempted, and for business owners saving tax even if interests are more than 10-20-50Lpa by just paying 1.5% income tax of total interest.

Can you elaborate your last paragraph more? Or in simpler terms?

 

[Nemesis]

Personally speaking, Housing Loan is the cheapest loan one gets.

We Indians are petrified of INTEREST cos are dada, pardadas have seen zamindari system and fall prey to it as interest rates were as high as 4-8% per month.

So the saying, Jitni chaddar utne hi pair failao.

But off lately, i would only suggest to use this interest portion to set off against 80C and 2L additional exemption.

Now i can suggest you a trick where all interest gets exempted, and for business owners saving tax even if interests are more than 10-20-50Lpa by just paying 1.5% income tax of total interest.

Please DM me the trick... Tax Gulu 🙂

 

[Morpheusarch]

Agree to all except EPF.. Never underestimate epf earning.. it is compounded, tax free and necessary for social security.. home loan is your cheapest loan 8.5 reducing.. with tax benefits cones to around 6% nett...

With the recent delays in interest payments and reductions in interest rates, it's not what it used to be a few years ago.
P.S. Still contributing 12% to it.

 

[jack333]

Personally speaking, Housing Loan is the cheapest loan one gets.

We Indians are petrified of INTEREST cos are dada, pardadas have seen zamindari system and fall prey to it as interest rates were as high as 4-8% per month.

So the saying, Jitni chaddar utne hi pair failao.

But off lately, i would only suggest to use this interest portion to set off against 80C and 2L additional exemption.

Now i can suggest you a trick where all interest gets exempted, and for business owners saving tax even if interests are more than 10-20-50Lpa by just paying 1.5% income tax of total interest.

Please also DM me the trick. Thanks

 

[Zacobite]

With the recent delays in interest payments and reductions in interest rates, it's not what it used to be a few years ago.
P.S. Still contributing 12% to it.

It is backed by govt.. delay in interest is fine.. what reduction in interest rate? it is still one of the safest and highest rate.. We will need to earn @11.5% pre tax to get 8.1 post tax.. you will benefit when u retire.. 12 % will help you a lot.. keep going.. we all will need social security.. especially pvt sector where no pension is there

 

[Morpheusarch]

It is backed by govt.. delay in interest is fine.. what reduction in interest rate? it is still one of the safest and highest rate.. We will need to earn @11.5% pre tax to get 8.1 post tax.. you will benefit when u retire.. 12 % will help you a lot.. keep going.. we all will need social security.. especially pvt sector where no pension is there

The interest rates have have gone down from 8.8% to 8.1% in the last 6-7 years (almost 10% decrease). Going further its going to decrease as well. If you're looking for a pension instrument then NPS is a better option than EPF since you can control your allocations to different components. NPS also has its own cons (can't redeem before 60) but in terms of returns it will beat EPF since you can include equity and fixed income over the long term.

 

[Zacobite]

The interest rates have have gone down from 8.8% to 8.1% in the last 6-7 years (almost 10% decrease). Going further its going to decrease as well. If you're looking for a pension instrument then NPS is a better option than EPF since you can control your allocations to different components. NPS also has its own cons (can't redeem before 60) but in terms of returns it will beat EPF since you can include equity and fixed income over the long term.

Good luck..!! As humans. we will find innovative ways to spend.. i am yet to meet someone who invests 25% in NPS ( which is the forced rate at which we save in EPF).. by sheer value it will beat most options on tax treatment.. + Some minimal pension as well.. NPS is a super instrument for sure.. just not to be compared with epf...Hope you are able to beat EPF in the long run in amount and %..Cheers

 

[Morpheusarch]

Good luck..!! As humans. we will find innovative ways to spend.. i am yet to meet someone who invests 25% in NPS ( which is the forced rate at which we save in EPF).. by sheer value it will beat most options on tax treatment.. + Some minimal pension as well.. NPS is a super instrument for sure.. just not to be compared with epf...Hope you are able to beat EPF in the long run in amount and %..Cheers

Most companies give an option to choose between EPF and NPS. Central govt employees don't even get that option and they have to choose the NPS route. I'm still going the EPF route as of now but not from a pension or a tax saving perspective, I think from a debt instrument standpoint its returns are pretty competitive (and also I don't plan to work till 60 hence don't want major chunk of money stuck there). But when it comes to saving tax and retirement income, NPS as a product is superior than EPF as it also comes in the EEE category.

At the end of the day there are major pros and cons on both sides and it comes to the individual's perspective and use case of the product which is better suited to them. Like for mine, even though I think NPS is a better option I'm not going to contribute towards it more than the 50k for saving tax because of the redemption limitation. Your use case might be different hence you might prefer a different product.

 

[Zacobite]

Most companies give an option to choose between EPF and NPS. Central govt employees don't even get that option and they have to choose the NPS route. I'm still going the EPF route as of now but not from a pension or a tax saving perspective, I think from a debt instrument standpoint its returns are pretty competitive (and also I don't plan to work till 60 hence don't want major chunk of money stuck there). But when it comes to saving tax and retirement income, NPS as a product is superior than EPF as it also comes in the EEE category.

At the end of the day there are major pros and cons on both sides and it comes to the individual's perspective and use case of the product which is better suited to them. Like for mine, even though I think NPS is a better option I'm not going to contribute towards it more than the 50k for saving tax because of the redemption limitation. Your use case might be different hence you might prefer a different product.

Lots of pvt cos have both epfo and nps..you can have both.. rest as you say.. personal preference basis their financial plan 🏆

 

[harsh42s]

Personally speaking, Housing Loan is the cheapest loan one gets.

We Indians are petrified of INTEREST cos are dada, pardadas have seen zamindari system and fall prey to it as interest rates were as high as 4-8% per month.

So the saying, Jitni chaddar utne hi pair failao.

But off lately, i would only suggest to use this interest portion to set off against 80C and 2L additional exemption.

Now i can suggest you a trick where all interest gets exempted, and for business owners saving tax even if interests are more than 10-20-50Lpa by just paying 1.5% income tax of total interest.

Can you please explain the trick about this? I would like to explore, if you could DM this.

 

[thanix]

Home loan interest exemption capping of 2L is only for self occupied property.

Entire home loan interest without any capping can be exempted for let out property.

So decide it accordingly ☺️

 

[harsh42s]

So the trick is to show that the property is let out to someone and claim full interest expenses? But, in case you let out, then you also need to show rental income. How to get around this better?

Home loan interest exemption capping of 2L is only for self occupied property.

Entire home loan interest without any capping can be exempted for let out property.

So decide it accordingly ☺️

 

[agrawalshishir]

Can you please explain the trick about this? I would like to explore, if you could DM this.

We need more information, i hope your CA can help but incase he cant pls dm your information required for structuring the transaction.