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Banks have a lien of all the securities/ movables of customer that comes into their hands and thus can retain them until the loans are settled off. However,the bankers only get the right of general lien over properties that come into their possession during the normal course of business. In your case,the shares in demat account,are held as a custodian. What will prevail here will be the agreement which you signed while availing of a loan. Please check on the terms and conditions mentioned in the loan agreement.

I have a joint home loan with my wife. Do we need to declare our respective share of EMIs paid each year for tax deduction?

Ranjeet Kashyap,Lucknow

As you both are joint borrower and joint owner of the house,as per income tax law,both are entitled to claim tax deduction benefits on the loan,but only up to the extent of your respective shares in the loan repaid during a particular financial year. For this purpose,it is imperative,that you both disclose the quantum of loan repaid towards principal as well as interest component respectively for each year.

Besides,you can also change the share in the property and hence your share in the loan and the tax benefits available to each of you. Please document the changes if made during the financial year,to avoid any problems in getting your tax benefits. However,any such changes in the ownership pattern are likely to have stamp duty implications.

I had taken a loan against property of R 56.12 lakh at 10.5 per cent from Barclays bank. Due to the interest rate hike,the rate was first increased to 12 per cent and then to 13.5 per cent. Can banks increase the spread whenever they want?

Ramesh Kapoor,Delhi

The interest rates of the banks are governed by RBI and as and when RBI makes changes in its policy rates,banks tend to follow. If you want to change the loan to another bank,you will have to consider few costs like processing fee,pre-penalty charges,documentation,valuation fees etc. Ideally,you should transfer your loan to new lender if the interest rates differential is at least 1.5 8211; 2 per cent for the two banks. Also,larger the loan tenure,better it is for you to transfer the loan.

The expert is Business head,Rupeetalk
For your personal finance queries please email at expressmoneyexpressindia.com

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