I am planning to buy an under-construction house. I have to make the full payment upfront, but the property will be delivered three years later. To finance the purchase, I intend to take a bank loan and an overdraft against the fixed deposits of my fath-er, an NRI. Will the overdraft be considered as a home loan for claiming interest exemption? Is it all right if I take an overdraft against NRE deposits?

Yes. The overdraft will be considered a loan for claiming deductions of interest as long as you can prove that the funds from the account were utilised for the purpose of acquiring the house. You are also allowed to take a loan against NRE deposits.

However for claiming deduction or the interest payment in respect of the home loan (assuming it is for a self-occupied property), you will have to obtain a certificate from the bank stating that the loan has been used for the purpose of buying the house.

Deduction for interest payable to the bank will be available only from the year in which the constru-ction is complete, irrespective of whether you are pa-ying EMIs or only interest.

Another point you may want to consider is wheth-er it is wise to pay 100 per cent for a property that will be delivered three years later. You are carrying a huge risk of delay in construction especially in today’s uncertain real estate market where even large developers are delaying delivery.

Are construction-linked loans eligible for income-tax deduction?

You are not entitled to I-T benefits in respect of the interest before you actually acquire the possession of the property. However, for all interest paid prior to the year in which you took possession, you’re entitled to a deduction in five equal instalments beginning the year in which you take possession of the property. This is subject to a limit of Rs 1.5 lakh, if the property is self-occupied. Please note that if you have made any repa-yment of the principal bef-ore taking possession, the same cannot be claimed.

I am a Central government employee, around 50 years old. I had undergone angioplasty and the expenses were borne by the office. Please advise me on whether I need to buy a health insurance?
It is always advisable to have your own health insurance policy, even wh-en your employer covers you under a group health insurance plan.

This is because you may not continue to work in the same organisation and new company may or may not offer any health cover or may have a lower health insurance cover.

Even when you eventually retire and, if the Central government health insurance is not available or available only for a limited sum, then it would be difficult to get a fresh cover at an advanced age.
Moreover, pre-existing illnesses are covered after a waiting period of three to four years even if you buy a fresh health insurance cover. While buying any fresh insurance including health insurance, make sure you disclose your medical history correctly.

It is also possible that cardiac problems might not be covered for the first four to five years of the policy.
You will also have difficulty getting a mediclaim policy in first place but you should try nonetheless.

Harsh Roongta is the CEO of Apnapaisa.com. You can send in your queries to movingmoney@deccanmail.com