Bank loans at market value

[bkrag]

I have shortlisted a 40x60 site which has BBMP khatha. The guidance value is Rs 700. I plan to go for a composite loan (site + construction). If I go through PSU banks, I believe that I will be getting x% of the sale deed value, which is approx 1/4th of the market value.

The question: How do I get finance for the bigger amout? I can self finance for 30% of the market value, but for the 70% of the market value, I need a bank loan.

How can I get bank loans from PSU or private banks, which can finance for 70% of the market value? Are there any workarounds w/ banks within the legal purview?

Also, the seller is insisting that I pay 50% in cash and 50% in cheque. With the self finance of 30%, I still need to pay 20% in cash. How can I manage this?

Those who have already undergone similar experience, please share your thoughts.

~bkrag.

[akula]

bkrag,
You can get loan from IDBI housing finance ltd at the market value of the property at 9% interest rate for upto 75% of the property cost. The market value of the property will be estimated by the bank officials which wil be close to the actual market value.

I too had this problem of seller asking for cash. We know that by paying cash we are converting our money into black. Finally paid him abt 15% in cash which was self financed and took receipt for the same.

-Akula

[bkrag]

Will I have any legal issues if I pay 50% by cash to the seller? How will Income Tax dept consider this?

Basically, all have is white By paying in cash, I am converting "white" to "black".

~bkrag.

[Ravi h.g.]

Hi Bkrag,

instead of registering your site on guidance value of Rs 700/- , you do it at a bigger amount where you can meet your target(say for Rs 1500/-). but you need to shell out more on stamp duty. also check with your auditor about tax implications.

Regards,
Ravindra Kumar hg

[akula]

I got a call from my bank after a week or so asking for reasons for drawing so much (3 laks) in cash. i told them the fact. they recommended me to make the payment in DD/cheque in future. thats abt it. i dont know if there are any other implications. Having a "valid" receipt for your cash payment is a must so that you have a proof of how you spent your money.