Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Deduction of sec. 80c & 24 it act

Vinay somani (CA, CS) (Assistant Manager-Accounts) (549 Points)

28 March 2016

Whether it is possible that house property is owned by person( Suppose Mr. X) and loan taken in the name of same( Mr. X). but repay by any other person( Mr. Y). so it is possible that person(Mr. y) who repaying the loan is allowed deduction of 80C for repayment of home loan & interest thereon.

Reply
Follow
Share

14 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 28 March 2016

before hand, it should be cleared that why Y is repaying the debts of X, any agreement or relation?

Vinay somani (CA, CS) (Assistant Manager-Accounts) (549 Points)
Replied 28 March 2016

Mr. Y is son of Mr. X

Mr. Y is only repaying the loan. there is no written agreement for the same.

Sandeep Garg (Consolidation and IndAS Application) (1056 Points)
Replied 28 March 2016

Deduction of loan is allowed only to the person who has taken it.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 28 March 2016

for 80C Y is eligible,

for section 24 its doubtful,

as whether there is any income out of property of X is unknown,

balance apart from this subject their other income income status, viz holding second property also matters,

but 80C is available in hands of payee, without any doubt

Vinay somani (CA, CS) (Assistant Manager-Accounts) (549 Points)
Replied 28 March 2016

First of all Thank you U S Sharma for Replying

As per my view Mr. Y is allowed.

Can you provide me any reference or specific provision for the same

MR. X is a salaried person. No other property is hold by Mr. X and no income is generated from the property it is purely SOP.

Mr. X having income only from Salary.

And this is just family terms. Loan taken by father and repay by son.

Now please give me your Valuable Guidance

Sandeep Garg (Consolidation and IndAS Application) (1056 Points)
Replied 28 March 2016

In my opinion, in case of joint ownership, co-owner paying the loan can claim the whole deduction but a third party (unrelated) can not.

J P SINGH (Accountant) (67 Points)
Replied 29 March 2016

80c and 24 b is allowed to whom based on certificate.

JITENDER BHOLA (N/A ) (25 Points)
Replied 29 March 2016

Mr.Y can be shown as Money lender for Mr.X in books of accounts for such repayment. And by applying this Mr.X can easily claim deduction.

Viral Bhatt (Student n self employed) (23 Points)
Replied 29 March 2016

In my opinion Mr. Jitender Bhola has suggested the correct treatment for the current situation. Now talking about other scenario where suppose mr y is repaying loan for the purpose of saving tax by claiming deduction only then mr x have to make new agreement may be by way of gift will etc & make mr y co- owner in the same property, by doing so mr y will be eligible to claim deduction & hence save tax. But still I will suggest you to apply above suggestions in the experts guidance like CA, etc.

Viral Bhatt (Student n self employed) (23 Points)
Replied 29 March 2016

# All deductions 80c, 24b...

sachin (CA Practice ) (34 Points)
Replied 29 March 2016

deduction of section 80c will available to the persone who has taken the loan

Vinay somani (CA, CS) (Assistant Manager-Accounts) (549 Points)
Replied 29 March 2016

Thanks to all of u for your valuable guidance.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 29 March 2016

Mr X is earning Salary

Loan is taken on sole computation of Mr X financial status, ( Mr Y is nowhere since the loan grant to position handover)

Mr X is alive and not disabled, but earning, and as he hold a home loan then its assumed that he is also paying income tax, and well in position to claim the deduction of both sec 24 and 80C

so under what circumstance Y should get eligible to claim u/s 24?