Applicable GST on real estate transactions

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February 23, 2024

While purchasing under-construction homes in India, such as flats, apartments, and bungalows, buyers must pay a Goods and Services Tax (GST) at a rate of 1% for affordable housing and 5% for the non-affordable property. The GST is also applicable to the purchase of developable plots in real estate.

GST for a flat purchase

GST on flat purchases will become mandatory in India in 2023 for those purchasing apartments and flats in ongoing development projects. If you purchase a home in a project that has already been finished, take note that GST on flat purchase is not applicable. A project is considered to be finished legally after it has been granted a completion certificate by an appropriate body.

GST on flat purchase 2023

Property type	GST rate till March 2019	GST rate from April 2019
Affordable housing*	8% with ITC	1% without ITC
Non-affordable housing	12% with ITC	5% without ITC

Notably, builders were granted a one-time option to select between the old and the new rates by May 20, 2019, for their ongoing projects, even though the new tax rate without input tax credit (ITC) will apply to all new projects. Only projects that were uncompleted as of March 31, 2019, qualified for this offer.

Taxes before the introduction of the GST

At the various stages of a housing project’s construction cycle, a number of state and central taxes were levied on buildings prior to the introduction of the GST single tax in 2017. Although these taxes raised the cost of project development for developers, builders were not eligible for a credit against this tax on the output liability. Prior to the implementation of the GST, real estate developers were required to pay taxes such as:

Entry Tax
LBT
Octroi
Service Tax, etc.
Value Added Tax (VAT)
Central Excise

The property buyer was then charged for the builders’ tax expenses. Due to the intricacy of the rates for the various taxes, developers were also able to alter numbers to raise prices for customers. Finding out the rates of VAT, Central Excise, Entrance Tax, LBT, Octroi, and Service Tax that apply to the construction of a home used to be a challenging feat for the average buyer.

After the introduction of GST

The GST, which became effective in India on July 1st, 2017, was regarded as the country’s largest tax reform since independence. Several indirect taxes were merged under the GST to give taxpayers a unified system. The GST regime’s real estate tax category has seen a number of modifications since it was first introduced.

Types of state and federal taxes that the GST absorbed

These are the types of federal and state taxes that the GST replaced when it became effective in July 2017:

Central taxes

Service Tax
Central Sales Tax
Central surcharge and cess on supply of goods and services
Excise Duty
Customs Duty
Special Additional Duty of Customs

State taxes

State surcharge and cess on supply of goods and services
Taxes on advertisement
Purchase tax
Taxes on lotteries, gambling and betting
State Value Added Tax
Entertainment Tax
Luxury Tax
State Excise Duty

What is affordable housing, in terms of GST?

Housing units worth up to Rs 45 lakh qualify as affordable housing by the government’s definition. Yet in order to qualify as affordable housing, the unit must also meet other requirements. If a housing unit in a metropolitan area costs up to Rs. 45 lakhs and is at least 60 square metres in size, it is considered to be an affordable home. Metropolitan cities include Delhi-National Capital Region, Bangalore, Chennai, Hyderabad, Mumbai-Mumbai Metropolitan Region, Kolkata, and Chennai. If a housing unit costs up to Rs 45 lakh and has up to 90 sq m of carpet area, it qualifies as an inexpensive dwelling in any other Indian city besides the ones stated above.

What is input tax credit (ITC) under GST?

The ITC system, which distinguishes the GST law from India’s prior tax structure, is one of its distinctive features. A real estate developer incurs various tax payments on the purchase of products and services during the course of a housing project. The builder would receive an input tax credit under the GST system when he paid his output tax.

Example:

A developer must pay tax on his completed project of Rs 25,000. When buying goods like steel, cement, paint, etc., the builder already paid Rs. 21,000 in input tax. After correcting for the input tax credit, he would only be required to pay Rs 4,000 in output tax in this case.

GST on reasonably priced real estate

Here is an example of how to compute GST on affordable housing segment flat purchases both before and after the April 1, 2019 rate change:

Affordable housing	GST on affordable housing before April 1, 2019	GST on affordable housing after April 1, 2019
Property cost per sq ft	Rs 3,500	Rs 3,500
GST rate on flat purchase	8%	1%
GST	Rs 280	Rs 35
ITC benefit for material cost of Rs 1,500 at 18%	Rs 270	Not applicable
Total	Rs 3,510	Rs 3,553

Effect of GST on high-end real estate

Luxury property buyers would save more than they would have previously under the new GST rates. Here is an example of how to compute GST on a luxury apartment purchase:

Luxury housing	Before April 1, 2019	After April 1, 2019
Property cost per sq ft	Rs 7,000	Rs 7,000
GST rate on flat purchase	12%	5%
GST	Rs 840	Rs 350
ITC benefit for material cost of Rs 13,000 at an average of 15%	Rs 126	Not applicable
Total	Rs 7,714	Rs 7,350

Tax on public housing initiatives

The government has made it clear that under the new system, only 1% GST will apply to government-led mass housing projects intended for the average individual. These housing schemes include the Rajiv Awas Yojana, the Pradhan Mantri Awas Yojana, the Jawaharlal Nehru National Urban Renewal Program, and housing scheme of state governments.

GST on building services

While the GST regime does not directly apply to real estate in India, a range of the sector’s operations and services are subject to taxation under the new system. The rates at which related activities in the construction sector are assessed under India’s GST system are as follows:

Under-construction home bought under the PMAY Credit-Linked Subsidy Scheme (CLSS)	8%
Under-construction home bought without the subsidy	12%
Works contract for affordable housing	12%

GST rate on construction and building materials

While all materials used in the development work are subject to GST, the Goods and Services Tax (GST) applies to real estate in India through works contracts, building, and constitution activities. Simply defined, the new regime covers the Indian construction sector, which continues to be subject to high tax rates through a variety of levies imposed on the purchase of different building construction supplies.

Applicable GST housing society maintenance fees

If a flat owner pays their housing society at least Rs 7,500 in maintenance fees, they are subject to paying 18% GST on residential property. Housing societies or residents’ welfare associations (RWAs) must also pay 18% tax on the total money collected if they collect Rs 7,500 a month per unit. However, housing societies are excluded from paying the GST if their yearly revenue is less than Rs 20 lakhs. Both requirements must be met for the GST to be applicable, i.e., each member must pay more than Rs 7,500 per month in maintenance fees and the RWA’s annual revenue must exceed Rs 20 lakhs.

In addition, the government has made it clear that the entire sum is taxable if the monthly fees for each member exceed Rs 7,500. For instance, the 18% GST on flats will be payable on the total value of Rs 9,000 and not on Rs 1,500 (Rs 9,000-Rs 7,500) if the maintenance fees are Rs 9,000 per month per member. Also, owners of numerous flats in the same housing society will pay taxes separately for each unit.

RWAs, on the other hand, are eligible to claim ITC on taxes they pay on input services like repair and maintenance services as well as capital goods like generators, water pumps, lawn furniture, and taps.

GST on rent

When is the tenant liable for paying GST?

Tenants who are GST-registered and rent a residential unit must pay an 18% tax on the rent amount. On July 13, 2022, the GST Council announced a change in this regard. The new rule is applicable to both businesses with an annual revenue over Rs 40 lakh and individual service providers who make more than Rs 20 lakh. GST registration becomes mandatory in both the instances for the individual/business.

When the Landlord is liable GST?

Residential property rentals for commercial purposes are considered a supply of services under the GST scheme. If the annual rent exceeds Rs 20 lakh, an 18% GST rent on residential units is levied against the landlord under this regime. Landlords are required to register in this situation in order to pay the GST on their rental income. A GST of 18% is charged on commercial property rentals.

GST on a mortgage

Financial organisations provide a number of “services” as part of house loans, even though the borrower is not subject to the GST on loan repayment. Since that these are services, the GST’s application becomes relevant. As a result, the processing cost, technical valuation fee, and legal fee would all be subject to GST if you apply for a housing loan with the bank.

Facts about GST

The GST treats residential projects that contain up to 15% commercial space as residential properties.
On commercial property, the actual GST is 12%.
For the acquisition of plots, there is no GST due.
When you purchase a ready-to-move-in flat, there is no GST due.
Unless the tenant is a business company, landlords are exempt from GST obligations.
GST and home registration: If you’re purchasing a property, you’ll still be required to pay stamp duty and registration fees. However, GST does not cover these costs.
GST is applied to the processing fees, legal fees, and other services provided by banks as part of house loans.
Around a dozen different taxes have been merged into the GST.
To account for the GST cost, sellers raise the price of properties that are ready for occupancy.
Homes that are still being built are less expensive than completed residences, even with the GST being applicable.
GST is only applicable to apartments that are still being built; it does not apply to ready-to-move-in apartments.

It is significant to note that the real estate industry is not included in the scope of the GST. The “work contracts” system is used to determine the tax rate that applies to a property building. For this reason, a developer is not permitted to add GST to the price of residences that are ready to be occupied. A property is labelled as ready-to-move-in upon completion and after acquiring the occupancy certificate, and is no longer bound by a work contract. In other words, the GST would be applicable to the sale of properties that are still under construction and are awaiting Occupancy Certificates. The previous administration required buyers to pay service tax on the purchase of ready-to-move properties, which deserves to be included here as well.

The developer/owner would eventually include this cost as part of the total price of the property, though, given he has already paid GST as part of the acquisition. This essentially means that even if GST is not applicable to ready properties, the buyer still has to pay it.

GST charged by builders on a one-time maintenance deposit

The one-time maintenance deposit that builders take from home buyers is subject to the GST, according to the Gujarat bench of the Authority for Advance Rulings (AAR). The authority claims that this charge is non-refundable and belongs to the category of supply of services. However, the AAR also stated that, in the future, when this money is actually used to pay for maintenance work, the GST will be subtracted from the maintenance price.

Remember that before the foundation of the residents’ welfare groups or cooperative housing societies, which take over responsibility for maintenance from the builder, most real estate developers collect a one-time maintenance deposit from home buyers. After the RWA and CHS are established, they take exclusive responsibility for the maintenance tasks and are permitted to establish their own set of guidelines for determining maintenance fees. It would made builders unable to interfere in the matter.

This particular liability for home buyers is based on the size of the property; they are required to pay a specific amount per square foot.

There have been numerous cases when conflicts have developed between buyers and developers regarding the applicability of GST on the one-time maintenance payment since there has been a complete lack of clarity regarding the laws governing collection of this levy.

Developers frequently transfer the remaining funds into the common fund after deducting GST at the rate of 18% immediately following the collection. After the AAR decision, developers would be required to deposit the entire sum without any GST deductions.

Furthermore take notice that before the GST regime came into force in 2017, builders were not required to pay service tax on these maintenance deposits.

Although the builder would have initially charged this fee, the AAR’s decision now allows RWAs and CHSs to collect the GST from society members as needed. In essence, from the perspective of home buyers, it is just a delay in the payment.

Land transactions are exempt from GST

Since the sale of land does not entail the transfer of any goods or services, it is also not included in the GST on construction services. For taxable real estate transactions, the GST offers a standard abatement of 33% of the entire contract value towards the value of land because the cost of land is an important factor in property prices.

Example: How to calculate the GST on a flat that is under-construction

Let’s say a builder sells a buyer a Rs 100 house that is still under-construction. In order to determine the GST on construction, the land value of Rs 33 will be subtracted from the total, leaving Rs 77 for which the GST on construction would be charged.

GST rate for developable land

If you buy developable plots, there won’t be any GST to pay. This was established by a circular the Central Board of Indirect Taxes and Customs (CBIC) released on August 3, 2022, which said that even if some basic infrastructure has been completed, plot sales are not subject to GST. Recently, a similar decision was also passed by the Karnataka AAR.

Before, certain state officials adopted a conflicting viewpoint. For example, the Madhya Pradesh Appellate Authority of Advance Ruling (AAAR) ruled in July 2022 that land sold after involving in development activities will be subject to an 18% Goods and Services Tax (GST). The Gujarat Authority of Advance Ruling issued a similar decision in 2021.

Prior to the implementation of the GST system, sales of immovable properties were not subject to the value-added tax, and as a result, only direct taxes, such as stamp duty and registration fees, were paid.

What is developable land?

Only those plots qualify as developable plots if the owner has all the necessary approvals from local and municipal authorities to carry out future development over the land parcel. The owner must develop the fundamental infrastructure as well in order to facilitate future development.

The land parcel would qualify as developable land if any or all of the following had been done there:

Laying work of water pipelines
Laying work of underground sewerage lines
Setting up of water harvesting facility
Setting up of sewage treatments plants
Development of landscaped gardens
Setting up of a drainage system
Demarcation of plot
Ground leveling
Boundary wall construction
Road construction
Construction of overhead tanks

GST on the plot

Even if the selling of plots is exempt from the GST regime, any little construction on the plot would be subject to the tax. In the event that such a plot is sold, one-third of the plot’s value will be deducted, and GST will be applied to the remaining two-thirds of the land’s value.

GST on developable plot sales

If the land parcel for which the transaction is recorded meets the criteria for developable land, there are GST ramifications even though the sale of plots is exempt from them.

The sale of developed land was formerly believed to be exempt from the GST until the Gujarat Authority for Advance Rulings (AAR) specifically said in a judgement that it was a “service” and hence taxable under the existing system. This is so that the sale of land and the sale of buildings will not be recognised as either a supply of goods or a supply of services, according to a listing in Schedule-III of the CGST Act.

Applicable GST on farmer compensation: Karnataka AAR

The Karnataka Authority of Advance Ruling (AAR) has declared that the compensation given to farmers for giving their land while a project is being completed is subject to goods and services tax.

The AAR has ruled that reimbursement of land compensation amounts paid to farmers and landowners during the execution of work is taxable as GST since the applicant does not meet the criteria to be a pure agency.

Impact of GST on registration fees and stamp duties

With the implementation of the GST regime, there have been repeated calls for the government to stop charging stamp duty and registration fees for real estate, but nothing has come of these calls. Thus, stamp duty and registration fees are still associated with real estate transactions in India. The registration price is either 1% of the property value or a specified fee, while states charge stamp duty in the range of 5% to 10%.

GST on flat registration

The registration fees paid while registering a property are not subject to GST. But can we anticipate that in the future, GST would also include registration fees and stamp duty? Experts don’t concur.

“Stamp duty on real estate transactions provides a significant portion of the income received by Indian states. The exchequer would suffer significantly greater losses if states chose to forfeit this money than it already does. This aspect makes us think there is little chance the GST will combine the two fees, at least not in the near future, said Lucknow-based attorney Prabhansu Mishra.

GST return on cancellation of a flat purchase

It’s possible that the GST regulations will be altered to allow homebuyers to get their money back if they decide not to buy the property for which they previously paid the tax. The new tax system does not currently provide a method that enables unregistered organisations, such as homeowners, to request a GST refund. At its 48th meeting on December 17, 2022, the GST Council suggested that the CGST Regulations, 2017, be amended and that a circular be issued outlining the process for unregistered buyers to file refund applications in such circumstances.

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TDS on Fixed Deposit Investment and tax benefit in India

Tax Savings

By

Bhanu Sahu

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February 23, 2024

Like other earnings, the interest you gain from investing also applies to tax deductions, also called TDS on FD, which vary from instrument to instrument. Certain financial tools, such as PPF and various life insurance policies, are tax-saving havens. In contrast, some are heavily taxed based on the nature of their earnings, such as income from the equity stock market. Before delving into how TDS affects your fixed deposit investment earnings, let’s go over the basics.

What is a Fixed Deposit?

With this income-generating tool, you can park your savings and extra income at a fixed rate of interest that will apply for the duration of your choice. This investment option is the safest for long-term financial goals because it has a low risk tolerance and an interest rate that isn’t affected by market fluctuations. The principal amount and interest that have accumulated over the term are given to the investor at maturity.

What is TDS?

The concept of deducting tax from an individual’s source of income is referred to as tax deducted at source (TDS). The Income Tax Department of the Indian Government centrally oversees this procedure. However, the deductee whose income has been taxed can get the amount deducted by submitting the Form 26AS or TDS certificate issued by the deductor when filing income tax returns. The interest received on fixed deposits is entirely subject to TDS.

All about TDS on FD investments

All fixed deposits provided by banks and NBFCs are tax deductible. For different age groups, different interest deduction thresholds are applicable.

TDS on Bank FDs

Interest income is taxable if it exceeds Rs 40,000 for citizens under the age of 60 and up to Rs 50,000 for senior citizens. TDS is deducted at the rate of 10%.

TDS on non-bank (NBFC) FDs

The tax deduction threshold for non-banking finance company (NBFC) FDs is Rs 5,000. If the earnings on a company FD exceed Rs 5,000, the interest will be taxable. TDS is deducted at a rate of 10%. However, if you fail to provide your bank or NBFC with your PAN information and your interest on FDs exceeds the aforementioned amount, 20% of the interest will be deducted as TDS.

Indian citizens pay 10 and 30% less TDS than their NRI counterparts, respectively. To request tax benefits in either situation, you can submit Form 15G or Form 15H at the beginning of the fiscal year.

You can either submit supporting documentation or file for a TDS return later if your overall income is below the tax slab threshold.

About Form 15G and 15H

Your income must be below the minimum tax slab for the specific financial year, according to Forms 15G and 15H. If their total investment income does not exceed RS 2,50,000, citizens over 60 are also exempt from paying TDS on interest earned on fixed deposits. They only have to submit Form 15H. You can request a TDS refund on fixed deposit income when filing your yearly tax returns if the TDS has been applied and your overall income is below the minimum tax threshold.

You can now start your investment journey and plan to manage tax deduction wisely with this information.

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Everything You Need to Know About Consolidated Account Statement

Feature

By

Bhanu Sahu

-

February 21, 2024

The consolidated account statement is a comprehensive document that gives the investor all the information they require about their transactions and investments related to depository accounts and mutual fund investments. After giving all depositories the responsibility of gathering this crucial investor-related data together with their PAN in 2015, SEBI put CAS into place. The CAS contains a complete record of all purchases and sales involving a particular mutual fund. As a result, investors can systematically track the progress of mutual funds over time. Each month, a free copy of the document is distributed to users, typically via email in soft copy. You must make a request in order to receive them in hard copy as well. They typically consist of:

Details regarding AMC and mutual funds – All financial transactions, such as purchases, fund transfers, bonus payments, and bank account information.

Investor Information – This information includes the investor’s name, contact details, nominee registration, bank contact details, and method of holding the units.

Why is CAS significant for investors in mutual funds?

Consolidated mutual fund statements have numerous advantages for mutual fund investors, including:

Investment Tracking: CAS makes it simple to keep track of investments because it contains all the information about financial transactions, lists all holdings and their current values, notates consultant/mutual fund distributor fees, and more.
Aids in assessing the company: By providing investors with more details about a fund house’s or company’s financial situation, operating results, and general standing, the consolidated mutual fund statement helps them make informed investment decisions.
Reduction in Paperwork: Paperwork management is greatly streamlined as a result of the organisation and collection of all the information into a single, well-organised document.
Less Paperwork: The organization and collection of all the information into a single, well-organized document greatly streamlines the management of paperwork.
Straightforward: To make it easier for investors to stay informed, all subsidiaries are eliminated and the focus is solely on the overall performance of a fund or company.

How to generate a Consolidated Account Statement?

To generate the CAS, follow these five steps:

Visit the website at https://www.camsonline.com/.
Navigate to the Investor Services tab.
Select CAS-CAM, Karvy, FT, or SBFS.
Enter your email address and PAN (Permanent Account Number).
Choose your own password, which does not have to be the same as the password assigned to the mutual fund account.

How do AMCs compute Consolidated Account Statement?

AMCs publish distributor commissions in common account statements in addition to including all marketing costs paid on distributors in the form of gifts/rewards, travel, and event sponsorships. AMFI has asked that AMCs determine the commissions based on the average AUM that each investor holds in each scheme. The statement of transactions and holdings for a shareholder’s Demat account with NSDL and CDSL is determined by the CAS. Information on transactions and holdings across numerous Demat accounts and mutual funds is available from the NSDL CAS. Additionally, it covers dematerialized stocks, warrants, preference shares, and mutual fund units. The remaining components are money market instruments, securitized assets, government securities, and corporate bonds. Investors can get a consolidated view of their holdings or funds under a single PAN with platforms like Karvy, Cams, FTAMIL, and SBFS. It will be sent to the investors via email.

What does a consolidated account statement include?

The two primary parts of CAS are:

AMC and Mutual Fund Details: Every financial transaction, including fund transfers or mergers, dividend and bonus payments, bank account information, and redemptions before or after maturity dates, is documented in a consolidated mutual fund statement. They also include information on reinvestment and whether an NFO is being made. It offers details on the investment strategy, such as the closing and opening share unit portfolio balances, whether they are lump sum or SIP (Systematic Investment Plan) transactions. According to the AMC’s statement, some investors opt for the Systematic Withdrawal Plan or Systematic Transfer Plan.
Investor Details – In addition to your name and contact information, a consolidated mutual fund statement requires nominee registration and your bank’s contact information. It also includes information on the ISIN, UCC, and unit holding mode for each plan and portfolio. CAS makes it easier to check the KYC status and nominee registration status. However, it won’t include sensitive data like your bank account number or PAN.

What are the drawbacks of a Consolidated Account Statement?

It combines information about the company’s assets, liabilities, and revenue. When an AMC gathers all the information about a fund, it might omit gains or losses. This might be as a result of the inter-branch transactions being hidden while the consolidated financial statement is only shown.

Bottom Line

As an investor, you should be knowledgeable about your financial situation, investing goals, risk tolerance, short- and long-term plans, portfolio diversification, and other factors. Before making any kind of investment, always remember to do thorough research. You can do this with the help of online tools or mobile applications. They can give you real-time market updates, expert advice, price alerts, and other helpful insights. Ensure you receive the consolidated account statement on a regular basis to keep track of your investments and make the most of them.

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A Step-by-step guide to start investing in Rental Properties

Investment Advice

By

Bhanu Sahu

-

February 20, 2024

You might be wondering where to begin if you’re considering investing in rental properties. You likely have an optimistic picture for your new investment property, similar to many first-time investors, one that includes dependable tenants, passive income, and eventual financial independence. Yet, how do you get there from here? You begin with the fundamentals, just like everything else. You can start a profitable investing career by adopting even the most basic rental real estate basics.

This starts with understanding different property kinds, returns on investment, mortgages, and the procedures required by law to purchase a property. A mistake that could cost you your investment could be avoided with the help of your initial investigation. How to begin investing in rental properties is provided below:

Decide property type

You must decide between purchasing residential and commercial property before making a purchase. Both can assist you in achieving your prime objective of passive income. They do differ in some key ways, though.

Residential real estate is land that you rent to people looking for a primary residence or living space. You might have a family, a student, a young professional, or someone else as a tenant. The beginning price of residential properties is often cheaper. Banks frequently accept credit scores lower than they would for commercial loans, making residential mortgages more accessible. You’ll have an easier time filling your units because residential properties are in higher demand.

Real estate used for business purposes is known as commercial real estate. The site could be used by the company for industrial, commercial, or retail uses. Commercial real estate requires mortgages, which are marginally more complicated than residential mortgages. Buildings with more than five units are automatically categorised for tax purposes as commercial properties in various states. Find out if this principle one similar to it—applies in your state by speaking with a mortgage officer there.

Determining the value of a property

You need some options after decideding a property type. You may have already decided on a neighbourhood or a few properties. How can you decide which is the wisest financial choice for you? These are two important elements to take into account when determining a property’s value:

Location: To potential tenants, location is crucial. Is the property at a convenient location, close to commercial hubs, or both? These elements increase the property’s desirability and support higher rent rates. Location in a renowned school district affects worth more than you might realise. In fact, one of the key determinants of renter and buyer demand, as well as return on investment, is school districts. Young families that are willing to spend extra for their children’s education and look past drawbacks are drawn to areas with good schools.

Follow the 1% rule

One method for calculating return on investment is through qualitative considerations, but you should also have the numbers to back up your conclusion. Will the property bring in a constant flow of rent? Or will the property ultimately cost you more in terms of time and money than it can ever give you back? Fortunately, you may use a general guideline to determine an investment’s strength before you make it.

According to the “1% rule,” a property is likely to be successful if you can rent it out at a rate that is one percent of the initial mortgage. Based on demand and the prices of nearby properties that are similar to yours, you should be able to determine whether the rate you estimated is fair.

Consider purchasing a duplex for Rs 310,000. You contribute a 25% down payment, or Rs 77,500. Your remaining debt is a Rs 232,500 mortgage. Rs 1,162.5 is equal to one percent of the Rs 2,325 remaining on the mortgage, or Rs 1,325. The duplex is probably a wise investment if you can rent both flats for about Rs 1160 per month.

A quick method for determining an investment’s potential is the 1% rule. It shouldn’t be interpreted as a verdict, though. Each investment’s viability is influenced by a variety of elements, such as your existing cash flow, the state of the property, the amount of property taxes due, locational trends, and other elements. The 1% rule will bring you close, but do your research first.

Financing your home

You’ve finally decided on a property. If you’re like the majority of investors, you’ll have to take out a loan to buy it. Finding a mortgage lender, negotiating the terms, and putting money down are required. Let’s examine mortgage kinds, deposits, and interest rates in more detail:

Types of mortgages: There are numerous varieties of mortgages. The two most popular types of mortgages are fixed-rate and adjustable-rate loans. Whereas adjustable-rate mortgages have an initial fixed rate that fluctuates as the loan matures, fixed-rate mortgages have an interest rate that remains constant for the entire term of the loan.

Down payments and interest rates: You’ll need to make a significant down payment in addition to selecting a mortgage type and term (15 years, 30 years, etc.). Because your lender takes on less risk when you make a larger down payment, you will be able to get cheaper interest rates. On the other hand, higher loan rates come hand in hand with lower down payments. 20% down payments or less are typically regarded as adequate.

legal reference list

It is your responsibility as the buyer to anticipate problems before a purchase is made. Before you make it official, you need take the following steps to make sure your investment is properly protected:

Check the property documents: A physical deed that conveys the property title verifies the owner of the property. Check sure the seller is the current owner by looking at the most recent deed on record before signing a purchase agreement. A title firm or lawyer can help with this. After that, look for any liens against the property. When an owner still owes money, a lender may place a lien on the property as security. Any outstanding liens on the property prevent its transfer.In order to properly transfer ownership, the seller and the buyer (you) must both sign the title documents.

Get title insurance: If something dubious, like an imprecise lien, appearing after you transfer the title, title insurance will protect you. It’s a requirement of some lenders to get a mortgage. The average cost of title insurance is Rs 1,000.

Verify property tax receipts: After that, make sure the prior owner paid all required property taxes. Directly ask the vendor for receipts, or ask the tax office of your regional government to provide them.

Property Inspection:Employ a professional home or building inspector to perform an inspection and determine whether there are any issues you should be aware of before purchasing the property.

Sign the purchase contract: You and the seller enter into a contract known as a property purchase agreement. It covers the purchase price and any negotiated terms, just like any other contract. The contract will be sent by your agency. Talk to them about any concerns or requirements you want to be mentioned.

Just like you, every successful investor had to start somewhere. You can obtain financial freedom by working hard up front. You are now ready to purchase your first property and begin your real estate investing career.

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Commodity Investment? A Guide to Investing in Commodities

By

Bhanu Sahu

-

February 16, 2024

When creating an investment portfolio, investing in commodities is frequent; many financial experts only advise investors to allocate assets to stocks and bonds (or funds holding these two asset classes). Yet, other experts contended that in order to assist investors in lowering risk and even out returns, portfolios should be widely diversified.

And that’s where investing in commodities comes in. Commodities, including precious metals, energy, agricultural products, and more, fluctuate in response to factors unique to their respective industries. These may be appealing trades as a result if you want to diversify your portfolio.

Here are a few things to take into account if you’re unsure of how to begin investing in commodities, along with a few strategies to consider and potential pitfalls.

Understanding commodities and investing

Commodities are raw materials, such as food, that are either used directly or indirectly to generate other goods. There are many ways to invest in commodities. Oil is a resource that is employed in the creation of a wide range of products and services. Airlines spend a lot of money on fuel for their aircraft, and the price of oil can significantly affect how profitable an airline is.

Buying physical commodities like gold or investing in exchange-traded funds (ETFs) that follow particular commodity indexes are two ways you can invest in commodities. Also, you can invest in the stocks of companies engaged in the production of commodities like oil and gas or precious metals. Before investing in commodities, make sure you understand the risks you’re facing because they can be highly volatile.

With futures contracts, which are agreements to buy or sell a commodity at a specified price and date, you can also benefit from commodities. If you predict the price of the underlying commodity correctly, futures contracts can make you a lot of money, but they can also cost you a lot of money. Make sure you are aware of the dangers so you can prevent margin calls and other situations that can affect the outcome of your trade, or at the very least, be prepared for them.

Investing in commodities: What to look out for

Investors may refer to commodities as if they were a single entity, but in reality, they are actually dozens of distinct items, each of which is subject to its own unique supply and demand.

Popular commodities

The following are some of the most popular commodities:

(Gold, silver, platinum, etc.) precious metals
Oil
Natural gas
Corn
Wheat
Soybeans
Cattle
Hogs
Lumber

Therefore, it’s crucial to concentrate on the unique factors driving each commodity when you’re looking for investments in them. For instance, if the price of gold is rising in the futures market, it might be because of a variety of distinct supply and demand problems unrelated to, say, natural gas or hogs.

As a result, commodity investing is much more complicated than the general term suggests.

Rule of supply and demand

Supply and demand are the key factors in commodity industries. Every commodity industry has a product that is essentially the same. Cattle are cattle, and wheat is wheat. Because of this, all producers are price-takers and are unable to set prices in normal circumstances. With many consumers demanding an undifferentiated product and suppliers unable to provide differentiated products, many commodity industries are excellent examples of what are known as perfectly competitive industries.

So supply and demand imbalances, which can happen for a variety of reasons, are what drive price changes. If supply becomes limited or demand increases, prices could increase. One of the most notable instances was the rise in lumber prices in 2021 as a result of the supply being partially restored after it had been shut down as part of the larger COVID economic slowdown.

However, if supply increases or demand decreases, prices could return to earlier levels or even decrease. As supply resumes and the situation returns to normal, the lumber price is also declining.

Understanding the supply-demand situation, where it is going, and how quickly it will arrive is necessary for investing in commodities. Prices frequently fluctuate and can rise or fall suddenly. As the old adage goes, “high prices are the cure for high prices.” In other words, if suppliers can profit from high prices by increasing production, they will do so, and prices will eventually fall to normal levels.

Lowest cost wins in commodities

Companies that produce at the lowest cost win in this situation because they are price-takers in commodity industries. They make the highest profit per unit and can continue to operate as long as the market is open, regardless of how much the price of the commodity declines.

The businesses that produce at high costs are typically the most precarious. If prices drop, they won’t be able to produce at a profit and since they are price-takers, they won’t be able to make any more money. Therefore, if the industry doesn’t recover quickly enough, they might eventually go bankrupt.

Obviously, if you’re trading the price of the commodity itself, you might have conflicting opinions about any particular producer, but if supply is hampered, it could contribute to price increases.

Price increases are frequently transient.

Over time prices of commodities will tend to move toward an equilibrium price that matches demand and supply. But in the short term, commodity prices are volatile and they will tend to overshoot this equilibrium price on both the upside and downside. So, markets often overcorrect as producers rush in to correct a lack of supply. But then they might stick around to recoup their investment and end up staying too long — pushing the commodity price below a sustainable level.

So price spikes and even massive declines are often short-lived. The spikes bring marginal suppliers online, while later declines shake out the marginal suppliers.

Risks of commodity investing

Volatility – Because of how volatile commodity prices may be, your portfolio is susceptible to significant price movements. The volatility is a significant risk as well as a potential opportunity.

Speculative – If your goal is to make money simply from changes in commodity prices, you are engaging in speculative activity rather than investing. Your asset won’t generate any underlying cash flows, thus the price of the commodity will be your only source of income.

Geopolitical events: Commodities are particularly vulnerable to global geopolitical events. For instance, prices for petrol and gasoline rose sharply in the wake of Russia’s invasion of Ukraine in 2022.

Weather – Weather patterns all across the world have an impact on commodity prices. The supply may suffer if adverse weather affects a commodity’s growth circumstances, driving up costs.

Concentration – Investing in commodities frequently entails having a significant exposure to the price of a particular asset, such as gold or oil. There are ways to partly diversify your risk, but you won’t be completely shielded if the commodity price declines.

Why investing in commodities is popular?

What exactly interests investors and traders in commodities if they don’t generate cash flow and price spikes are frequently transient? Some of the main explanations for their widespread appeal are as follows:

Protection from inflation

Commodities can safeguard your portfolio from inflation because the cost of these “hard assets” may increase over time in line with inflation.

Low correlation to other assets

Commodity-specific characteristics play a large role in how prices fluctuate, frequently for reasons that are very distinct from those affecting the overall economy. Their performance has a lower correlation with equities and bonds as a result. Commodities can be used to diversify a portfolio, lowering risk and smoothing returns because they have lower correlations with other asset types.

Defend other investments using a hedge: Your other investments may be less risky if you own a commodity. You can directly own oil and help reduce portfolio risk if, for instance, you own a business like an airline that may be highly vulnerable to the price of oil and would suffer if it soared.

Final Thoughts

Commodity investing helps diversify your portfolio, but many – perhaps most – portfolios can do so without the additional exposure if they are already well-diversified. You can still enter the commodity trading market in a variety of methods, but you should be aware of the advantages and disadvantages of each strategy. But keep in mind that price increases are frequently transient, thus commodities might not be the best long-term investments.

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Top 13 pastel wall color ideas to beautify your home

Decor

By

Bhanu Sahu

-

February 15, 2024

Pastel wall colors are a cheerful substitute for basic neutrals in any room that offer comparable brightness and adaptability. Use a palette of soft hues to play up their calming effects, or combine delicate pastels with bolder hues for a vibrant, high-contrast look. Get inspired by looking at these pastel room ideas.

Pastels are a cheerful medium between pure white and full-on color. These light hues add just a touch of color to your walls, adding depth and personality without being overpowering. Pastel paint colors provide softness and subtlety, whereas deep, saturated shades may feel overwhelming. Although pastel color schemes can be used anywhere in the house, they are popularly used in bathrooms and bedrooms because these rooms are meant to be places of rest and relaxation.

Pastel Lavender

The lavender color on the walls adds a subtle touch of color to the room. Warm pastel wall color harmoniously pairs with the wood floors’ red undertones, whereas a cooler color might have clashed. The doors, trim, and picture frames are all black, giving the soft color scheme a contemporary edge.

Relaxing Pastel Pink

Pink has romantic, adoring, attentive, and caring connotations. Indian homes frequently use pink in the children’s bedrooms. You should definitely add this gorgeous shade to your living room or bedroom. The walls in this home office are blush pink, giving it a warm glow. The soft pastel hue of the paint beautifully complements the crisp white used on the ceiling and trim, creating a visually appealing contrast that brightens and expands the low-ceiling space. The addition of black and gold accents adds a touch of sophistication and elegance, creating a polished and feminine aesthetic.

Mint Pastel Color

Embracing a cool mint pastel color, this bathroom exudes a serene and calming atmosphere. The mint green walls provide a subtle infusion of color amidst the predominantly white surfaces, resembling a tranquil spa-like setting. The simple color palette allows the eyes to rest, promoting a soothing effect. The inclusion of polished nickel fixtures and a sparkling crystal chandelier introduces an element of shine and luxury to the space.

Pastel White

In the living room, the pristine white walls serve as a perfect backdrop for any other pastel color to take center stage. Against this neutral canvas, any pastel shade shines brilliantly, offering an opportunity to experiment with unique furniture pieces like a dark wood chair or a vibrant yellow table, for instance.

Beige & Cream Pastel

When it comes to pastel colors, one cannot overlook the timeless duo of beige and cream. These classic pastel shades have stood the test of time and remain a popular choice due to their versatility. Beige and cream effortlessly complement various decor styles, making them a go-to option for creating a harmonious palette. Their adaptability is what makes them the quintessential pastel colors.

Aesthetic Pastel Blue

Blue paint can evoke a wide range of emotions, from soothing tranquility to playful quirkiness. The right pastel blue shade possesses that same power. It is crucial to select a shade that matches the desired atmosphere. Pastel blues are particularly well-suited for bedrooms due to their calming and serene effect, fostering a peaceful ambiance.

Warm Pastel Yellow

If you’re seeking to infuse a sense of happiness, positivity, and a burst of energy into a room, pastel yellow is an excellent choice. While avoiding mustard tones, pastel yellow can create a warm and vibrant atmosphere, particularly in spaces with limited natural light. Its sunny and cheerful vibe can uplift any room.

Vibrant Pastel Orange

Pastel orange, reminiscent of tangerines, exudes a vibrant and tropical aura. This citrusy shade is best suited for warm environments or rooms where a sense of warmth is desired. Even in its paler variations, pastel orange brings a muted yet lively vibrancy.

Baby Blue With Pastel

In a surprising twist, baby blue proves to be a color suitable for all genders and ages in bedroom design. This trendy and traditional style, showcased in a bedroom designed by Cardea Building Co., is both fresh and sleek, offering a versatile choice for creating a soothing retreat.

Soothing Pastel Grey

Create a tranquil haven in your bedroom by combining natural wood elements, soft linens, and delicate gray wall color. While we may not all reside in picturesque mountain cottages, we can infuse our own spaces with a similar sense of peace and tranquility. Seek out an ethereal white-gray blend to enhance the natural light in your room, creating a serene and inviting atmosphere.

Chilling Ice-Blue

For a bedroom that exudes an invigorating and lively ambiance, an ice-blue color scheme is an ideal choice. Incorporate chambray-like draperies, periwinkle-tinged rugs, a blueberry-checked headboard, and cornflower throw pillows to create a comprehensive wash of blue tones. Bright colors have mood-boosting effects, ensuring you wake up feeling energized. Opt for a bold shade of blue to bring both calmness and serenity to your sanctuary.

Seafoam Green

When designing a beach house or lake cottage-themed bedroom, it’s essential to select a color palette that captures the carefree and fun spirit of those settings. The combination of seafoam green and school bus yellow, while seemingly bold, can create a harmonious balance. The coolness of the seafoam green wall color counterbalances the warmth of the bed frame, resulting in a harmonious fusion. To bridge the gap between the two tones, consider selecting a quilt or comforter that incorporates both colors, further enhancing the cohesive aesthetic.

Blue Pastel Shade

Transform your bedroom into a tranquil retreat by embracing a spa blue color scheme. By painting the walls in a soothing and watery blue shade, you can recreate the ambiance of a luxurious spa. For a seamless look, extend the color to the ceiling, creating a continuous flow. Maintain the sense of continuity by adorning the windows with simple curtains in a similar tone. To balance the color scheme, introduce white or neutral elements such as a rug, bedding, and upholstery, ensuring a serene and balanced environment.

With these various pastel color options, each room can be transformed into a unique and soothing space, reflecting your personal style and promoting a sense of calm and relaxation. Whether it’s the gentle allure of mint green in the bathroom or the invigorating presence of ice blue in the bedroom, pastel colors offer a delightful palette for creating a tranquil and harmonious home.

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Understanding Commercial Property Loan

Home Loan

By

Bhanu Sahu

-

February 9, 2024

A secured loan obtained against any commercial property you own is referred to as a “commercial property loan,” and it enables you to obtain significant funding by mortgaging your commercial property. This method of mortgaging provides you with ample financing if you want to expand your business, whether it be by purchasing additional machinery, upgrading existing machinery, or purchasing new plants. If you own commercial property, you may be eligible for a loan for up to 60% of the property’s value with a maximum 15-year term.

Advantages of commercial property loans

Following is a description of the advantages of obtaining a commercial property loan:

Larger Loan Amount: If you choose a commercial property loan in India, you can get up to Rs. 5 crores, or 60% of the property’s value. This substantial sum of money will greatly assist you in meeting the needs of your business.
Lucrative Interest Rates: Because the loan is secured by a mortgage on your commercial property, you can get interest rates as low as 9%.
Seamless Process and Easier Terms: Commercial property loans have no end-use restrictions, and the process of obtaining them is transparent, seamless, and quick.
Custom Loan Solution: These loans are made to meet the particular needs of each business at hand because each has different requirements and needs of its own.

Interest Rate on Commercial Property Loans

The following fees and charges will apply to your loan if you choose to borrow money for a commercial property:

Applicant Category	Effective Rate of Interest (per annum)
Salaried/Self-Employed	9% p.a. onwards

The charges applicable on your loan are as elucidated below:

Fee Category	Applicable Charges
Processing Fee	Up to 0.35% of the loan amount
Foreclosure Charges	4% of outstanding loan amount + GST

The Pre-payment and foreclosure charges for individuals are as listed below:

Individual	Flexi Loan	Term Loan
Time Period	>1-year	> 1-year
Foreclosure Fees	NIL	NIL
Part Payment Fees	NIL	NIL

The Pre-payment and foreclosure charges for non-individuals are as listed below:

Non-Individual	Term Loan	Flexi Loan
Time Period	>1-year	> 1-year
Foreclosure Fees	4% on the outstanding principal	4% on the sanctioned amount during the Flexi Interest Only Loan Repayment Tenure and 4% on the available Flexi Loan Limit during the Flexi Term Loan Tenure
Part Payment Fees	2% on the Part Payment Amount	NIL

What’s the Process for a Commercial Property Loan?

You must first comprehend the process before choosing a commercial property loan in India. The following three factors must be considered:

Collateral: Before you can choose to take out a loan for commercial property, you must first own commercial property that is mortgageable. This can be in the form of a grocery shop, office building, manufacturing shop, and so on.
Loan Amount: In this case, the loan-to-value, or the LTV, will help determine how much funding you can obtain. Loan Amount: The loan-to-value, or LTV, will help determine how much funding you can obtain in this case. You will receive Rs. 50 lakhs if your property is valued at Rs. 1 crore and the LTV is set at 50%. Loans for commercial property have lower LTV rates than loans for residential properties.
Repayment: When it comes to repayment, the tenure on commercial loans is usually longer; as long as 18 years. You can use a Loan Against Property EMI Calculator to estimate the interest rates and make an informed decision about your loan.

Eligibility for Commercial Property Loans

The following criteria have been established in order to qualify for a loan for commercial property:

Particulars	Salaried	Self-Employed
Residency	It is necessary to be a citizen and resident of India, and a property owner in Delhi NCR, Mumbai and MMR, Chennai, Hyderabad, Bangalore, Pune, or Ahmedabad.	It is necessary to be a citizen and resident of India, and a property owner in Delhi NCR, Mumbai and MMR, Chennai, Hyderabad, Bangalore, Pune, or Ahmedabad.
Age	28 – 58 years	25 – 70 years
Employment Status	Employed in the public, private or MNC sector.	Should have a consistent source of income.
Income	Prices range from Rs. 25,000 to Rs. 35,000 depending on location.	ranges from Rs 25,000 to Rs 35,000 depending on the city.
Experience	more than 3 years of experience.	Experience of more than 5 years.

Commercial Property Loan Documents

You must have the following documents in order to apply for a loan for commercial property:

- Proof of Income: a PAN card, an Aadhaar card, a passport, a voter identification card, or a driving license.
- Proof of Address: Aadhaar card, Voter ID, Passport, Ration card, and Utility bills.
- Property Documents: Title documents as well as other ownership and mortgage-related papers.

PAN details or Form 60.

Salaried and self-employed parties must present the following documents as proof of employment and income:

Documents	Salaried	Self-Employed
Proof of Employment	Employer-issued identity card	Business registration certificate, partnership agreement and so on
Proof of Income	Income Tax Return for the last year	Income Tax Return for the last 2 years
	Last 2 month’s salary slips	Balance Sheet and Profit and Loss statements
	Last 3 month’s bank account statements	Last 6 month’s bank account statements

Commercial Property Loan EMI

Once the loan for commercial property is disbursed, it typically has a term of 15 years and a monthly interest payment. Depending on a number of variables, including market value, mortgage, credit history, ability to generate income, and the availability of documents, interest rates for loans against commercial properties range from 9% to 24%. Use an EMI calculator for commercial property loans once your interest rate has been determined to help you better plan your payments.

How to Apply for Commercial Property Loan?

To apply for a commercial property loan in India, you must complete the procedures outlined below:

Step 1: Go to the lender’s website and look for the application section.
Step 2: Fill out the form with your name, employment type, phone number, and email address.
Step 3: Next, enter information about your income and finances.
Step 4: Submit the application form online.

Once you have done so, a lending agency representative will contact you to process and approve your commercial property loan application.

Differences Between Funding Residential and Commercial Property

The following are the distinctions between funding residential and commercial property:

Funding Residential	Commercial Property
Typically made to individual borrowers.	Typically made to business entities.
This type of mortgage has a fixed rate and a 30-year repayment period.	The duration ranges from less than 5 years to 20 years, with a variable rate of amortisation.
A high loan-to-value ratio, or even 100% in some cases.	Loan-to-value ratio for commercial real estate loans ranges from 65% to 80%.

Considerations Before Applying for a Commercial Loan

Make sure you are aware of the following important factors before applying for a commercial property loan in India:

Run a background check on the builder if, by chance, you are requesting a commercial real estate loan for a project that is still under construction. Your loan may be turned down if the lender discovers any inconsistencies in the builder’s records.
Make sure the builder has all the necessary approvals for the construction before proceeding.
Make sure to have the property assessed by a professional to avoid paying a higher sum.

Disclaimer: Access to the content on this internet page is provided by iPropUnited as a courtesy to the public service for educational reasons based on related news and stories. The accuracy of any information on this website cannot be guaranteed, however, it is all believed to be credible.

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Everything You Need to Know About Commercial Vehicle Loans: Types, Eligibility, and Advantages

Feature

By

Bhanu Sahu

-

February 9, 2024

Commercial Vehicle Loan

Loans for the purchase of vehicles for commercial or business use are provided to borrowers, who are typically self-employed people, trusts, partnership businesses, organizations, etc. People who work in the transportation industry can get these car loans. Buses, trucks, tippers, tankers, light commercial vehicles, and small commercial vehicles can all be purchased with a commercial vehicle loan.

A Commercial Vehicle Loan’s Purpose

Commercial vehicle loans, as previously stated, are available to fund the purchase of a vehicle that will be used for commercial or business purposes. Leading lenders in the country, such as ICICI Bank, YES Bank, Indiainfoline, Mahindra Finance, and others, provide these loans at low interest rates. Application for a commercial vehicle loan is a quick, simple process that involves little paperwork.

Specifications of Commercial Vehicle Loans

The following are some of the main features of commercial vehicle loans:

If your profile complies with the requirements put forth by the lenders, you may be eligible for a commercial vehicle loan at a low interest rate.
A commercial vehicle loan has a quick processing time and simple application and approval processes.
Without requiring any security, the majority of reputable banks in India offer commercial vehicle loans at reasonable interest rates.
A personal relationship manager may be assigned by some banks from the beginning to the vehicle purchase. All paperwork will be completed by them, and they will take care of all loan-related issues.
The disbursal of the loan amount takes about 7 days after all necessary documents are submitted.

Commercial Vehicle Loan Types

Commercial loans are available for a range of commercial vehicles that are used in various locations and for a variety of purposes. It is classified into three broad categories based on the type of vehicle for which loans are sought:

New commercial vehicle loan: This kind of loan is given to customers so they can buy new commercial vehicles for their businesses. Banks will fund up to 100% of the vehicle’s chassis or base frame value. In some cases, depending on the borrower’s profile, banks will provide additional funding for vehicle body construction.
Old or used commercial vehicle loan: These loans are available to purchase all makes of pre-owned or used commercial vehicles. Borrowers can expect to receive financing for old vehicles up to 15 years old under this loan. The majority of banks offer funding of up to 90% of the used car’s value or depreciation grid value.
Commercial vehicle refinancing: In this type of loan, banks either offer to refinance an existing loan on a commercial vehicle that is already paid off or they assume an existing loan on a commercial vehicle and, if the applicant qualifies, extend the loan to cover additional costs. By refinancing an existing loan at a lower interest rate, some borrowers can lower their monthly payments and free up some cash, but others can get direct financing on their free vehicles to cover their working capital needs.

Who Is Eligible for Commercial Car Loans?

To meet their business needs, banks and other lenders provide commercial car loans to a wide range of customers. In other words, different customer groups with a variety of profiles can apply for this kind of vehicle loan. The list of consumers deemed eligible for this loan is as follows:

Individuals
First-time users and buyers
Small, medium and large-sized fleet owners
Trusts and societies
Schools and colleges
Captive customers and transporters
Proprietorship firms and Partnership firms
Public Limited & Private Limited Companies

Individuals who are salaried or self-employed can apply for a commercial vehicle loan with blood relatives or family members. On the other hand, directors of private limited companies and partners in partnership firms are both eligible to apply jointly for this loan.

Note: Banks and other financial institutions occasionally provide special schemes for first-time buyers and fleet owners.

Advantages of Commercial Vehicle Loans

Because of the numerous benefits that it provides, commercial vehicle loans are the most preferred option for borrowers who are either planning to purchase their first commercial vehicle or adding a new vehicle to their existing fleet of commercial vehicles. Below are a few of the key characteristics of commercial vehicle loans:

Flexible repayment tenure: Commercial car loans typically offer repayment periods of up to five years. This guarantees borrowers a low EMI amount, allowing them to repay their debts without experiencing an undue financial burden.
Multiple vehicle financing: For the purpose of expanding your business, you can obtain financing for a variety of vehicles, including tippers, trucks, buses, trailers, tankers, and small and light commercial vehicles, whether you are an individual borrower or the owner of a fleet.
Easy processing: Applying for a commercial vehicle loan is a quick, simple, and convenient process. Banks typically process new or used vehicle loan applications in 4-5 days after receiving all required documentation.
Simple documentation: The documentation process for commercial vehicle loans is simple and quick. Users don’t need to go to the bank directly because they can easily upload all required documents online.
No credit-score compulsion: Commercial vehicle loans, unlike other types of loans, do not require any prior credit history. Borrowers with poor or no credit can easily obtain a commercial vehicle loan.
Caters to multiple needs: The loan schemes are designed to meet the borrowers’ diverse needs, such as new and used vehicle financing, loan top-ups, and refinancing of loans/vehicles for working capital.
Customized solutions: Each commercial vehicle loan scheme is tailored to the vehicle type, loan duration, and financial ability of each individual borrower in order to meet the specific needs of the customer.

Commercial Car Loan Documentation

Properly completed application form with a photo attached
Two passport-sized photos
Processing fee cheque

KYC documents

Age proof- Aadhaar Card/PAN Card/Voter’s ID card/Driving License/Passport (Any one)
Identity proof- Aadhaar Card/Voter’s ID card/Driving License/Passport (Any one)
Residence proof- Rental agreement/Voter’s ID Card/Passport/Ration card/Tel bill or Elec. Bill/Trade License/ Sales Tax Certificate (Any one)
Signature verification proof-Driving License/PAN Card/Registered Sale Deed/Govt. ID Card (For Govt. employees) (Any one)

Income proof

Salary Slips for the Previous 3 Months
Recent six-month bank statement
Form No.16
Updated ITR for last 2 years
Official identification photocopy

Experience proof

In the case of first-time buyers, valid documents demonstrating relevant experience

Commercial Vehicle Loan Eligibility Criteria Loan

For new commercial vehicles

Both salaried and self-employed borrowers should have a minimum of two years of profitable business operations, as well as more than two years of stable employment.
Trusts, societies, associations, and private/limited companies must be at least two years old.
The ownership of one or two commercial vehicles for a period of one to three years must be verified by fleet managers and other current vehicle owners.
Trusts, societies, private/limited companies, and partnership businesses must provide two years of audited financials.
In some cases, individuals, first-time buyers, and fleet operators/owners will need an internal or external guarantor.
Customers must have a minimum of two years of stable residential living. Certain terms and conditions apply to borrowers with less stability.

For old commercial vehicles

The following requirements must also be met by applicants for a commercial auto loan for used vehicles in addition to the standard requirements:

Customers must have 3 to 5 years of relevant experience, depending on their individual profiles.
Minimum one year of two or more vehicle ownership.
Commercial vehicle repayment history of at least one year

Vital Aspects of a Commercial Vehicle Loan

Application process: First, the borrower must complete an online application form, then provide all required documents, and finally provide the personal guarantor’s information if required.
Loan approval: The bank will conduct a check to confirm the validity of the paperwork and the eligibility of the borrower. After reviewing the documentation, if the borrower is found to be eligible, the loan will be approved in 2 to 5 working days.
Processing charges: Banks charge a minimal non-refundable fee for processing a commercial vehicle loan. This sum varies depending on the size of the loan requested, but typically falls between 2% and 4% of the loan amount.
Loan Amount/Margin: Depending on each customer’s unique profile, different commercial vehicle loans have different maximum loan amounts. Borrowers are eligible for funding that covers up to 100% of the vehicle’s chassis.
A commercial vehicle loan typically has a repayment period that ranges from 6 months to 60 months (5 years). The borrower is permitted to pay back the money in convenient monthly EMIs.
Security/collateral: Depending on the borrower’s profile and the product, some banks offer loans for commercial vehicles without requiring any collateral or guarantors, while others do.
Loan prepayment: After six months from the date of application, borrowers may prepay their loans by paying a prepayment fee that may be up to five percent of the outstanding balance. However, partial loan prepayment is usually not permitted.

Interest Rates on Commercial Vehicle Loans

Commercial vehicle interest rates differ from one bank to the next. Lenders determine the amount based on the customer and the vehicle segment. The bank/lending entity confirms the final rate of interest to be charged for that profile after evaluating the documents and the profile of any individual borrower. In general, it ranges from 10% to 15% p.a. The following are the interest rates on commercial vehicle loans offered by some of the leading banks and financial institutions:

Name of the Bank	Interest Rate	Other Chrages
ICICI Bank	Will depend on the customer’s profile, tenure of loan, etc.	Additional documentation charges – Rs.350
HDFC Bank	7.01% to 17.00% IRR	Processing Fees: Up to 1.50% of the loan amount. Foreclosure/Prepayment Charges: Within 1 year from 1st EMI – 4% of Principal Outstanding. After 1 year from 1st EMI – 2% of Principal Outstanding
Kotak Mahindra Bank	Minimum: Reference Rate or Prevailing MCLR Maximum: 24%	Processing Fee: Up to 2% of loan amount Documentation Charges: Up to Rs.5,000 Prepayment/Foreclosure Charges: 5% of Principal Outstanding based on reducing balance repayment date
Axis Bank	9.00% to 15.50%	Processing Fee: Rs.5,000 Foreclosure Charges: Up to 6 months from disbursement date – 10% of the Principal Outstanding. Part-Prepayment Charges: After 6 months from disbursement date – 5% of the part payment amount. Up to 6 months from disbursement date – 10% of the part payment amount

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Vastu guidelines for placing a seven-horse painting in the home

Decor

By

Bhanu Sahu

-

February 8, 2024

Paintings improve a home’s aesthetics. The Vastu Shastra states that certain paintings draw good energy when placed in the right position. According to the ancient Vastu principles, artwork featuring horses has a lot of significance. Galloping horses in particular stand for power, achievement, peace, and forward movement. Consequently, hanging a seven-horse painting or a similar piece in one’s home or place of business is a great way to draw good fortune into one’s life.

According to Vastu Shastra, the south wall of a home or office is the ideal location to hang a painting of seven horses.

Vastu significance of seven horse painting

The Vastu Shastra considers horses to be one of the more auspicious animals. They stand for steadiness, bravery, strength, power, and allegiance. It is thought that hanging seven horse paintings will improve many aspects of one’s life. Running horses also represent growth and speed in life. Furthermore, the number seven is considered auspicious. According to Vastu Shastra, adding a painting of seven horses in the appropriate direction will encourage one’s efforts and produce favorable results.

The owner of a growing company or someone who intends to launch a new venture should hang this lucky painting in their office. Placing a seven-horse painting in the home’s Vastu-compliant direction can produce the desired outcomes for those seeking financial stability or career advancement.

This auspicious painting aids in removing negative energies, making it the ideal choice for home decor and attracting positivity into one’s life and career.

Seven-horse painting Vastu placement

It is crucial to better understand the impact and effect of placing seven-horse paintings in one’s home. The south wall of the house or office is considered the best direction for hanging a seven-horse painting. Keeping the painting in this location will be advantageous because this direction is linked to fame and success.

Alternatively, you can place the painting in the east or north direction if it is not possible to hang it in the south. The north direction represents wealth and success. A painting of seven horses placed on the north wall will bring good fortune to the family. The east direction stands for growth. So, placing a painting on the east wall will aid in career growth.

Placing a seven-horse painting in bedroom

There are a few dos and don’ts when it comes to Vastu Shastra principles that we must keep in mind when arranging various decorative items in the home. The rules also apply to the lucky seven horses because we want the painting to be successful.

According to Vastu Shastra, it is not advisable to hang the seven-horse painting in the study room, on the main door, in the temple or puja room, or on any walls that face the bathroom. The dining room and living room can both accommodate the seven horses’ picture.

Ideal place for seven-horse paintings at home

The living room is the ideal place to hang the auspicious painting of seven galloping horses. Always hang it from a wall facing the Vastu-recommended direction. Avoid placing the painting near the main entrance or window.

Avoid hanging the seven-horse painting in the bedroom, study, pooja room, or above the front door. Keep the seven horses painting away from restrooms and toilets.

Ideal place for seven-horse painting in office

Seven running horse paintings are thought to be auspicious and attract good fortune when placed in a workplace or commercial space. Keep this painting on the south wall of the office if you want to succeed and progress in the business. According to Vastu Shastra, the south represents fame and success. Alternatively, hang the painting on the east wall if this direction is not available.

Vastu suggests that the paintings of seven horses can be placed in the reception area. However, there are some Vastu principles that should be considered when hanging the seven-horse painting in an office or other commercial space. Ensure that the painting is facing the interior of the office.

Vastu tips for seven horses painting

The horses in the picture should be depicted as running without any obstacles in a straight line or in symmetry when the seven running horses are positioned in the Vastu-recommended direction. Instead of running on water, they ought to be shown running over open terrain.
The picture of seven-horse is ideal as it shows an odd number of horses.
According to Vastu, it is not advised to choose a single image or painting of a horse.
Make sure the painting doesn’t show an incomplete picture of the horses.
According to the Vastu, wall or the background for the seven-horse painting infuse positivity in the home. Therefore, it is crucial to make sure it is clean and does not appear dull.
The seven running horses Vastu painting must leave a good impression and be pleasing and inspiring to look at. Avoid placing any painting that does not bring positivity.
A painting of seven horses with a red background is associated with the influence of Mars planet. It will help to boost one’s self-esteem.
Seven blue horses represent the planet Saturn and will bring harmony and peace.
Make sure the painting is proportional to the size of the room. Avoid choosing a small painting for a big, spacious house.
Consider using a sturdy, Vastu-friendly material like canvas or wood for the horse picture frame or painting. Avoid using paper for the horse painting or wallpaper.

Vastu significance for seven-horse painting based on colors

7 horse painting colour	Significance
Grey	Grey color is associated with the planets Rahu, and Ketu.
White	The white color represents the Moon and also signified peace.
Orange	Orange is the color of the sun.
Blue	Blue represents Saturn and invites harmony.

Seven-horse painting with sunrise

Paintings of seven horses with a rising sun in the background are considered auspicious.

According to folklore, the seven-horse painting can bring prosperity and success into a person’s life. It is important to keep in mind the Vastu Shastra guidelines when placing this painting in a home or office.

Seven-horse painting with moon

Additionally, there are paintings of galloping horses with the moon in the background. According to Vastu, the auspicious seven-horse image represents harmony, advancement, and success.

Seven-horse near sea painting

A painting of seven horses galloping near the seashore is another option. This will infuse the home with positive energy and speed up your work. The seven-horse image can be hung in your home or place of business for beneficial effects.

Seven running horses painting in Feng Shui

The horse is regarded as an auspicious animal in Feng Shui and is said to represent strength, loyalty, growth, and speed. Horses represent the fire element, which is connected to fame, inspiration, and passion, and are also associated with yang energy. You can attract positive energy by displaying a horse painting in your living room.

A running horse painting is a common piece of home décor because it have significant cultural significance.

According to Feng shui, a horse’s distinctive action has a special significance.

Speed is represented by horses in motion, such as those depicted in some lucky seven horses paintings. A horse on four feet, on the other hand, represents strength and powerful energy.
You can choose a painting of seven galloping horses. Another option is to hang a painting of two horses. According to Feng Shui, a pair of horses represents two unique partners who have a close relationship.
The white seven-horse painting is very popular. White represents the metal element. Having this seven-horse wallpaper or painting on your wall will bring you wealth.

Vastu tips for placing seven white horses painting

According to mythologies from various cultures around the world, white horses have a special significance. They stand for purity, luck, happiness, and innocence. Since it is believed to bring good fortune, many people keep a painting of seven white running horses in their home or office. Horses were used as a form of transportation in the past. It also features a clear depiction of the Goddess Venus.

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Interim Budget 2024: What do homebuyers expect?

News

By

Bhanu Sahu

-

February 7, 2024

The real estate sector in India has been growing steadily, with home values witnessing a consistent rise. However, many potential homebuyers are finding it challenging to acquire a property due to several reasons. With the Finance Minister Nirmala Sitharaman set to present the Interim Budget 2024 on February 1, the homebuyer community has come up with a wishlist, hoping to see their requests addressed. They are looking for tax benefits, more flexible repayment facilities, and other measures that can make homeownership more accessible and affordable.

The Reserve Bank of India (RBI) has been maintaining a consistent repo rate in the current Financial Year (FY) 2023, which has provided immense relief to homebuyers. The RBI has projected a Gross Domestic Product (GDP) growth rate of seven percent in the current FY, and the World Economic Forum (WEF) expects India to be the fastest-growing economy in 2024-25. The real estate sector is expected to be a significant contributor to this growth. As an essential sector of the Indian economy, it is crucial that the Interim Budget 2024 considers the requirements of real estate’s key customers, i.e., homebuyers.

Expectations of Buyers’

Friendly home loan policies

In the previous year, the Reserve Bank of India (RBI) maintained the repo rate at 6.5 percent which helped to stabilize the loan rates and created a favorable environment for the homebuyers. This year, homebuyers are still looking forward to stable home loan rates and affordable EMIs. The RBI’s decision played a crucial role in providing financial predictability and affordability in the housing market. As a result, the demand for homeownership has increased and people are hoping for similar favorable conditions in the new year. The stability in interest rates is a reflection of the growing aspiration among people to own a house.

Tax benefits for homebuyers

Homebuyers in India are expecting a revision in the limit on tax deduction on interest paid on home loans under Section 24 (b). Currently, the limit is set at Rs 2 lakh, but industry experts suggest that it should be increased to Rs 3-4 lakh for self-occupied properties. However, for let-out properties, the limit can be removed altogether. Niranjan Hiranandani, Vice Chairman of National Real Estate Development Council (NAREDCO), has commented that policy measures such as an increase in income tax deduction on home loans up to Rs 5 lakh can help boost economic growth and make it the ‘Year of Implementation.’
To encourage individuals to view real estate as an investment, it is essential to provide tax relief on second or subsequent home purchases. As most homebuyers prefer availing home loans, it is recommended to increase the tax deductions on repayment of the principal amount under Section 80C from the current limit of Rs 1.5 lakh. Additionally, the existing capping of Rs 1,50,000 and Rs 50,000 for interest exemptions under 80EEA and 80EE (applicable to first-time homebuyers in affordable housing) should be raised to further incentivize home buying. Moreover, reintroducing tax exemptions for first-time homebuyers, particularly in the affordable housing segment, should also be taken into consideration.
Murali Malayappan, Chairman and Managing Director of Shriram Properties, has suggested some measures to boost the housing demand and supply in India. According to him, incentivizing housing purchase by liberalizing Section 24(b) of the Income Tax Act, 1961, deduction on housing loan interest under Section 80C, and rental income exemptions are some key steps that could significantly enhance the housing sector. These measures could encourage more people to invest in housing, leading to a surge in demand, and in turn, increase the supply of affordable housing in the country.
Currently, the construction industry in India faces the burden of paying Goods and Services Tax (GST) on individual raw materials. This results in a significant increase in building costs, which ultimately leads to higher prices for homebuyers. However, the implementation of a single GST for all construction materials can help in reducing property prices in the long term. In addition, it will also bring about more transparency in the process and fast-track stalled projects that have suffered due to cost overruns. Farshid Cooper, Managing Director of Spenta Corporation, has pointed out that it is crucial to pay attention to the stalled and pending projects. As these projects begin to see the light of day, the sector will have increased liquidity, and the stuck capital can be freed up for investment.”
Affordable housing developers were previously provided with a tax holiday which ended with the conclusion of FY 2021-22. To further incentivize homebuyers to invest in affordable housing, it is suggested that the tax holiday be reinstated. This would allow for better rebates and more lucrative schemes for potential homebuyers. The reintroduction of a 100 percent tax holiday for affordable housing projects under Section 80IBA would be an effective way to achieve this goal.

Expanding the price cap on affordable housing

Currently, affordable housing is defined as residential properties that are priced at or below Rs 45 lakh. However, due to inflation and the impact of real estate on the economy, there is a need to revise this upper limit. To encourage homebuyers and promote the growth of the real estate sector, a cap of Rs 50-60 lakh is recommended, which would provide various benefits. To make it easier for homebuyers to access affordable financing options, it is essential to standardize the definition of “Affordable Housing” across various government schemes and financial institutions.

Re-introduction of subvention schemes

The subvention scheme, which was previously banned, allowed homebuyers to avail loans without having to pay the interest on the availed credit immediately. This was especially beneficial for first-time homebuyers who had to bear the burden of both monthly rentals and EMIs simultaneously. With the lifting of the ban on subvention, homebuyers can now invest in properties with ease as they will only be required to pay EMIs after the possession of the property. This is expected to motivate homebuyers to invest in properties and is likely to boost the real estate sector.

PMAY fund allocation revision

The Pradhan Mantri Awas Yojana (PMAY) was launched in 2015 with the aim of providing affordable housing for all by the end of 2022. As the program nears its end, the government has increased the budget for PMAY by 66 percent to Rs 79,000 crore for the fiscal year 2024. Out of this allocation, Rs 25,103 crore has been earmarked specifically for PMAY Urban, with the goal of accelerating the Housing for All initiative.

However, the demand for affordable housing still exceeds the supply, and there is a need for incentives and subsidies to boost affordable housing projects. One possible solution is to provide tax incentives to developers who focus on affordable housing, which can encourage greater supply to address the growing demand in both urban and rural areas. Additionally, increasing the annual allocation for PMAY schemes could also be an effective way to drive demand within the affordable housing segment.

The government could also focus on increasing the fund allotment through the SWAMIH fund, which can improve liquidity in stalled residential projects.

As the Finance Minister, Nirmala Sitharaman, prepares to present the interim Union Budget 2024 on February 1, 2024, the real estate sector hopes for policies that will promote realty growth and economic development at large. The budget has the potential to shape the real estate industry into one that is both resilient and adaptable, making a substantial contribution to India’s economic growth. As the Government reveals its fiscal plans, the real estate sector is ready to embrace the opportunities presented.

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