I am a senior citizen, a telecom pensioner, and I received Rs 2,59,913 as pension for assessment year 2012-2013. I am to pay income tax of Rs 948 this month. As I have no savings for deduction, I have told the bank to deduct the amount from my pension for the month of March 2012.
I have taken a reverse mortgage loan of Rs 4,00,000 in September 2009 from Corporation Bank, to bridge the loan taken while buying the house earlier, and this point has been mentioned in the loan application. I have been remitting Rs 4000 per month as EMI. From March 2011 to February 2012, I have remitted Rs 47,000 towards interest for this amount. I can take a statement from Corporation Bank. Will I be eligible for claiming a refund of Rs 948? Kindly clarify.
It is good that reverse mortgage loans can be accessed while still repaying an outstanding loan on your home. This is possible due to the fact that you have clear titles, suggesting that the house is completely self-acquired, providing clarity of ownership, once the loan is repaid! Also, in spite of the fact that your eligibility and purposes of the loan could be capped, this is very good for you, as it helps you handle expenses that could come your way! The incoming money from your reverse mortgage loan, by itself, isn't taxable.
You also receive a pension that amounts to more than Rs 2.5 lakh, every year. Let's compare your situation to a salaried individual who has more than one income — say, one source is his salary, and the second, a passive income, which is exempt from tax. If he has a home loan, it really doesn't matter from which source he pays his home loan; he would still be eligible to claim tax benefits on his interest.
In that respect, you should consider incoming money from various sources as a single pool, when you need to factor in outgoing money that is eligible for tax exemption! So, in conclusion, do go ahead, submit the statement proof from the bank, and claim tax benefits for the interest repayment of your existing home loan. Hope this provides the required clarity for your situation.
(Adhil Shetty, CEO, BankBazaar.com, will respond to questions on home loans. E-mail questions to: blproperty@thehindu.co.in )