Author : Anonymous
( Author )
04 June 2012
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Case: I have an existing residential property in name of myself and wife (share not defined). I am purchasing new residential property and required to decide ownership patter for the same.
Should I register new property in my name only? Or again jointly with wife?
Housing deduction and benefits is required for me and not for wife.
I am evaluating two options and request to suggest the better one considering income tax , wealth tax and capital gain taxes and stamp duties applicable.
Option One: Registering new property in my name only: I will claim this new property as deemed to be let out and will set off full interest against my salary till interest component is high. Now after years when interest will be negligible, I will transfer 50% share in current house to my wife. Now I will be absolute owner of new property and my wife will be absolute owner of existing owner and both property will be exempted from income tax, wealth tax. I will be required to pay 50% stamp duty for this transfer and also transferring 50% share without consideration will still make me deemed owner of existing property. But I will try to show some consideration or will transfer at market value to avoid capital gain. Please evaluate this option?
Option Two: Registering new property jointly with wife: I will claim this new property as deemed to be let out and will set off full100% interest against my salary till interest component is high. Will I be able to take benefit of full interest though I am 50% owner? I will be paying full EMI and interest and will I be able to claim 100% interest?. Now after years when interest will be negligible, I will transfer 50% share in current house to my wife and in consideration she will transfer 50% share in new house to me . Now I will be absolute owner of new property and my wife will be absolute owner of existing owner and both properties will be exempted from income tax, wealth tax. Will transferring shares to each other for consideration at same time exempt capital gain? I need to pay stamp duty on the property(50%value) whose Market Value is more?
Please share opinion as to which option is good to follow. Also requesting to answer the questions asked in between those options.
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