Legal Question in Banking Law in India
My so has taken a housing loan of Rs 30 Lakhs from HDFC(not HDFC Bank).As per HDFC rules a person can prepay 25 percent ie Rs 7.5 Lakhs without any PREPAYMENT PENALTY CHARGE.He intends to pay back Rs 6 Lakhs soon .Out of this Rs 6 Lakhs he will pay Rs 3 Lakhs from his own savings and rest Rs 3 Lakhs I will give him as GIFT.AS PER INDIAN INCOME TAX RULES GIFT FROM FATHER TO SON IS TAX FREE.I will transfer Rs 3 Lakhs to my son's A/C from which he will prepay entire Rs 6 Lakhs.But HDFC is saying that for the father's contribution part of Rs 3 Lakhs they will charge Prepayment Penalty Charge.Only his own Contribution of Rs 3 Lakhs can be paid WITHOUT ANY PREPAYMENT PENALTY CHARGE.
Please advise regarding the RULE
2 Answers from Attorneys
the contention of the bank seems to be wrong. they cannot charge any penalty on your gift to your son.
Make a representation to the Bank as they cannot charge you or your son for prepayment of amount .
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