State Bank of India, the countrys largest public sector bank, has reduced interest rates on educational loans.

New rates for loan amounts less than Rs4 lakh have been reduced from 12.25% to 11.75%. Rates for loan amounts above Rs7.50 lakh have been reduced from 13.25% to 12.25%. Interest rates for amounts between Rs4 lakh and Rs7.50 lakh have remained unchanged at 13.25%.

Other banks may follow suit. Says M.P. Murugan, assistant general manager, Allahabad Bank: We are the leader in the educational loan space. We already have special lower interest rates for IIT and IIM students, at 11.25%. However, if the need arises, we may look into reducing our rates as well.

N.R. Shet, general manager, Corporation Bank, says: We do not have immediate plans to reduce educational loan rates, but
you cannot rule out the possibility of us doing so. Our rates are not that high, so we will wait and watch.

Any cut is, of course, good news for students. Hsoc Matthai, 17, a student from Mumbai, says: Educational loans are necessary. My brother and I are planning to go for professional courses this year. Even a small decrease in interest rates makes a lot of difference. We would rather go to a bank that offers lower rates.

Vacancy gain? Check it out

If, despite your best efforts, you havent been able to rent out your property for a full year, dread not; you may not be asked to pay tax on it. The Income-tax Appellate Tribunal (Itat), Mumbai, has recently ruled that a property that has remained vacant for a year is entitled to vacancy allowance. This implies that the owner will not have to pay tax on the notional rental value of the property.

This ruling was given in the case of Amrit Petroleum for assessment year 2001-02. It had argued that the property remained vacant despite the best efforts of the owner to find a client and, therefore, the owner was entitled to the vacancy allowance for a full year.

As per the income-tax law, tax is levied on the notional rental value of the property if it remains unoccupied for a year. However, a provision for a partial vacancy allowance exists in case the property is rented out only for a part of the year.

The ruling doesnt mean any amendment in income-tax laws. Tax experts say Itat is like an income-tax court where a particular decision is given after considering the circumstances of that case. If there is a similar case with similar facts, the lawyers can plead and cite this judgment to be considered. It cannot be equated to an amendment to the Income-tax Act.

According to real estate lawyer Rishi Awasthi, such a ruling will come into force only in extraordinary circumstances. In ordinary cases, tax would still be levied on the vacant house, he says. Urmila Rao