Dear Sir,
I am having Housing Loan Outstaning amount of Rs.6 Lakhs as on date, i have received my PF settlement amount around Rs.5 Lakhs, whether i can pay the full PF amount to my Housing loan outstanding or can i pay 50% and retain remaining loan for my IT exemption purpose.
If i pay full amount to Loan, then hence forth i have to pay Tax on my income.
Request your kind advise on this to overcome the hurdle.
Thanks in advance,
Raju.
At what rate you are repaying the loan just see.
You can invest that money in tax free bonds where the return may be more than the int of housing loan. You also can get tax rebate from Int and Investment upto 1.5lakhs for principal under 80C.
If you are repaying the loan @ 10% then buying Tax free bond @ 8.7% could be benfecial bcoz int itself is tax free.
However I advice you to partially pay principal of 1.5 lakhs and dont make any further investment under 80C. Any repayment of principal beyond 1.5 lakh does not help under 80C.
Tax free bonds come from Dec to march.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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