By CHAITALI DUTTA
Though I have the money to buy a car, should I take a loan of some amount and later repay it?
—S D Vashist
A car is a depreciating asset. Hence, taking a loan for creating a depreciating asset is counterintuitive. If you have the money to buy the car outright, go ahead without taking a car loan.
I could not deposit annual instal-ment of Public Provident Fund (PPF) in 2020-21 due to the pandemic as well as personal reasons. Can I do it now before filling the ITR and get tax rebates?
There was a time extension given for deposits for FY 2019-20 due to Covid-19 disruption. However, no such extension has been provided for FY20-21. Hence, a penalty of Rs 50 will be applicable here.
I plan to take an education loan for my son. Can I claim income tax benefit under Section 80E?
—Samir Kumar Gupta
Section 80E deduction is in respect of interest on loan taken for higher education from a financial institution or approved charitable institution. Ensure that the university is an authorised education institute. As far as the bank is concerned, the section specifies that “financial institution” means a banking company to which the Banking Regulation Act, 1949 applies or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf. If these conditions are fulfilled, you will be able to claim the deductions.
I am a 52-year-old salaried private sector employee. I want to take a home loan. Is there any upper age limit to take a loan from a bank or a housing finance company?
For a salaried person, the loan tenure is matched with the retirement age. This is flexible in case a person is engaged in business. The specific situation—age of the borrower, type of business, business partners, history of business, track record— determines the repayment period. Usually, having a younger, working co-applicant, either a son or a daughter, increases the tenure and as a result, reduces the EMI.
The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your queries to firstname.lastname@example.org
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