Hi,
My employer (IT firm based out of Bangalore) insists the following:
"As per the xxx Policy and income tax rules, in case if the housing loan interest document is in both names (irrespective of whether the other name is just because he is a co-applicant or co-borrower), then by default, the interest amount and principal amount is restricted to 50%. In order to get the full benefit (100%), then you need to provide some document (like sale deed/ tax receipts) to prove that you are the sole owner of the property (i.e. Sale deed/ tax receipt should be only in your name)."
But from what I have read both co-owners / co-borrowers can claim 100% of tax benefits. Let me quote from one of the blogs I have read:
https://blog.cleartax.in/tax-benefits-on-home-loan-for-joint-owners/
"Each co-owner, who is also a co-applicant in the loan, can claim a deduction of maximum Rs 2,00,000 towards interest on the home loan in their Income Tax Return - where the property is the only property owned and it is self -occupied or is lying vacant. For a property which is given on rent the entire interest can be claimed as a deduction.
Each co-owner, can claim a deduction of maximum Rs 1,50,000 towards repayment of principal under section 80C. This is within the overall limit of Rs 1,50,000 of Section 80C"
Please advise if my company is doing the right thing. In my case, my co-owner is my mother who is retired and has no income or taxes to pay.
Can a company reduce the tax benefits available to me by 50% because the sale deed has a co-owner?
CAclubindia
