23 December 2014
A joint home loan is taken for renovation, reconstruction and extension of a house by a son with his father. Father is the owner of property while son is only the coborrower with his father but not a co-owner.
And son alone is repaying back the full EMI to bank. Father is neither repaying any amount nor claimimg any income tax rebate as his income is not in taxable slab.
Whether, son who is a coborrower with his father but not a co owner can claim income tax rebate for this loan that he is repaying? If yes, then how?
23 December 2014
As per my Opinion Only the person in whose name property is registered can claim benefit of Interest on Loan u/s 24 and Principal u/s 80C of Income Tax Act.
I advise to repay the Loan First and then Make a Registered Gift Deed from Court and After transfer made in son name take a loan in son name. Then son can claim benefit.
Also If house is under construction then benefit would be started after completion certificate in 5 equal instalments for next f.ys next to the f.y in which completion certificate recd.
23 December 2014
Rupesh Sir, You are right as per present situation but after repayment of loan such property can be gifted by father to son. After the trasnfer of title he can do what i hv advised in my early reply
CAclubindia
