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I have zeroed in on an apartment that the owner (who has been living there for the last three years) intends to sell with all the furniture.

Can I include all these costs in the total home loan?

- Kumara Guru

If you are planning to enter into a single agreement for the cost of the house and the furnishing, then getting the loan based on this agreement amount should be possible. However, this is subject to the bank's valuer agreeing with such a valuation.

The flip side to this arrangement is that you will have to pay stamp duty on the entire agreement value.

If you enter into an amenities agreement with the seller, most major home finance players will fund you on the amenities agreement as well provided the value of the amenities agreement does not exceed 20% of the value of the main agreement.

Your decision should be driven by the stamp duty implications for which you should consult a local property lawyer.

• No possession? Check tax benefits

What is the definition of 'completion of construction' of a flat being sold by a builder?

1. A completion certificate by the builder?

2. A completion certificate by the local municipal authorities?

3. Any other?

Which of the above will satisfy the income tax authorities for claiming the tax benefits on home loans.

- D S Rao

You have raised an extremely interesting question.

I have not been able to come up with a single case law on this topic (seems like even in litigatious India, some things are not litigated).

In my opinion, the common sense definition of completion of construction -- when the flat is ready for occupation as is commonly understood -- should be acceptable.

Proof that you (a tenant) are actually staying in the flat should be sufficient at least for income tax purposes.

But, as I have said, this has not been tested in any legal forum.

Fortunately, the proof of completion of construction need not be filed with the return; this issue will arise only if specifically raised by the assessing officer.

• Is your home legally safe?

What happens if I die when I am still servicing my home loan? Is there any facility available so that the Equated Monthly Installment is paid by the bank or any insurance company?

- Mahesh Dusane

You will need to take an insurance policy to ensure the home loan is repaid by the insurance company in case anything unfortunate happens to you during the tenure of the loan.

Some banks (primarily nationalised banks and ING Vysya Bank [Get Quote]) have bundled such an insurance product along with their loan and the cost of the insurance policy is factored in the interest cost charged to you.

However, in other cases, nothing stops you from taking a separate insurance policy in this regard and paying a separate premium for this facility.

In fact, it is highly recommended.

Got a question for Harsh Roongta? Please write to us!

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