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The two entities involved in the transaction apply additional fee for a foreign credit card transaction resulting in an additional cost of 5 to 6 per cent for the end user

I made some purchases using my international credit card but not before calculating how much I would need to pay up according to the currency conversions. However,when the bill arrived,it seems a good 5-6 per cent higher? Can you explain this?

Archana Rai,Pune

The two entities involved in the transaction apply additional fee for a foreign credit card transaction resulting in an additional cost of 5 to 6 per cent for the end user. The first entity being the issuing bank like SBI or ICICI and the second,network service providers like VISA and MasterCard. The primary reason additional fee applied is because of intricacies and additional cost involved with currency conversion. Yet another reason is addition of a small margin of profit by the issuing bank and Visa/ Master Card.

Should I opt for a ready to move in house or an under construction property?

Debojit Mitra,Delhi

Ideally,try to move into a house that is nearly complete. Each has its own advantages and disadvantages. Immediate possession,savings on rent you might pay etc. are advantages but on the other hand the prices for such homes can be around 25-50 per cent more than under construction homes. Also if the house had previous owners,you need to be that much more careful about paperwork and condition of the home. On the other hand,the main disadvantage with under construction property is delays in handing over the finished property while others include differences in prototype and the actual house delivered and builder reputation etc.

Are Indians allowed to buy property abroad?

Chulbul Mishra,Lucknow

Indians are permitted to buy property abroad by making an annual remittance of up to $20,00,000 in a financial year. The Foreign Exchange Management Act also permits Indians to acquire property abroad as gifts or through inheritance. Additionally resident Indians can own property elsewhere,in case it was acquired while they were not residents of India. However,one must consult trusted legal experts in the country where they want to buy the property regarding local taxation policies,citizenship laws and ownerships provisions. Many nations mandate foreigners to pay a huge property transaction fees while making the purchase. Extra stamp duty costs are often levied on foreigners acquiring property in certain countries which may significantly add up to the total cost.

The expert is CEO,Bankbazaar.com
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