Query relating to house renovation loan - urgent

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This query is : Resolved

Gargi Ranade (Querist)

19 March 2018 Dear All,

We have applied for the Loan for renovation of House, bank has granted us loan against mortgage of Property , as predecided, Bank has made direct payment of Loan amount in the name of the Interior Decorators Account , meanwhile Decorator has changed many terms in the Contract by his own , which were not acceptable us , because of which contract was recinded .

Now, we have proceed for the renovation contract from some other contractors , wherein different kind of works shall be performed by different vendors ( like, Civil, electrician , plumber and Carpenter )

We have asked our earlier interior in whose Account bank has paid money to refund the balance amount of loan which he has not yet spent .

Now, we want to take back the money in saving Bank Account of the same bank from where we have taken loan , will there be income tax related issues , because now the balance amount will reflect as reciept from Contractor and it wont be direct deposit of funds from bank towards home loan disbursement.

Our EMI will be repaid through same saving bank account. Please guide us, it is urgent

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)

19 March 2018 Sir,
Did you consult your bank and informed them about rescinding of the contract? Did they tell where the money recovered should be kept?

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)

19 March 2018 I feel you can do the following in order to keep the Dept at bay:
1. Give a notice to the contractor about rescindment of contract and mention that you had availed the loan from a Bank for this purpose and that you want the money back.

2. Inform that you need the money by way of cheque/dd/rtgs etc.

Send the notice in RPAD and mark a Copy to the Bank as well

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)

19 March 2018 This notice will help you if the Dept asks for any query

Gargi Ranade

Gargi Ranade (Querist)

20 March 2018 Asked to my Bank Manager , he said do not transfer loan amount to same bank account as they will directly treat as syphoning case. Even though it is genuine case. Really in a big mess.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)

20 March 2018 No. It will not be treated as siphoning case. You mail your Bank branch and mark a copy to the Zonal office/ CIrcle Office clearly explaining your position. Then the matter will be in their court. If they feel it will mean siphoning, then it is their responsibility to guide you

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