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If the new property is bought on a loan,one should also get an additional life insurance cover. Lot of times the lender insists that with the loan you a take an insurance policy and the premiums will also be added to the loan amount. Beware of such acts and prefer a Term Insurance instead of the normal mortgage cover as in term insurance your cover remains same throughout the loan repayment period,where as in mortgage insurance the cover get reduced as you repay the loan through your EMIs.

My cousin wants to sell her property bought 2 years back and buy a new property. Is there any clause that one should not sell property within 3 years of purchase else there will be some charges applicable. Can you please advise?

Raju Raj,Delhi

You have righty heard 8211; if you sell before completion of 3 years,it will be short term capital gain and there is no provision of saving tax arising due to this transaction. The whole gain amount will be added to your taxable income and will be taxed as per income tax rate slabs.

A real estate consultant told me that if I buy a second house it will help me in tax saving. Please explain tax implications of buyinga second home loan?

Sujit Roy,Chennai

You can claim tax deduction benefits on the interest for second home. For self occupied home,loan interest deduction has restriction of Rs 1.5 lakh but for second home this restriction is not applicable. Tax benefit is available for any number of property and is without any limit under specific circumstances. The income from house rent and interest paid on loan is calculated separately for each property owned.

If such a calculation results in a loss,it is allowed to be set off against your income from other heads.

Hemant Beniwal,Certified Financial Planner,For queries on real estate,please mail us at estatesexpressindia.com