Change in sharing of home loan deductions

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 January 2015 My query is with regards to sharing of Home Loan Interest & Principal repayment deductions under Income Tax.

I & my wife had bought a flat (we are joint owner and joint borrower), for which we had been claiming Interest and Deductions as 50-50 share each until now.
Recently she has stopped working and hence does not have any income.
All the EMI's till date have been paid by my own individual salary account.
I am planning to claim 100% of principal and interest from this year onwards as she has no income to sustain EMI.

Is there any rule which denies the same?
Is change in claim percentage denied by any law?
Will it be illegal to change claim from 50-50 to 100%?

Querist : Anonymous

Querist : Anonymous (Querist)

20 January 2015 Can someone provide there opinion on this please?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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19 July 2024 In India, claiming deductions for Home Loan Interest and Principal repayment under Income Tax follows specific rules, especially when the property is jointly owned and the loan is jointly taken. Here’s how you can approach the change in sharing percentage:

### Understanding the Situation

1. **Joint Ownership and Borrowing:**
- You and your wife jointly own the flat and are joint borrowers for the home loan.
- Until now, you have been claiming the deductions for Interest and Principal repayment on a 50-50 basis.

2. **Change in Financial Circumstances:**
- Your wife has stopped working and no longer has income to contribute towards the EMIs.
- You have been solely paying the EMIs from your individual salary account.

### Clarifying the Rules

1. **Income Tax Provisions:**
- As per Income Tax laws in India, deductions for Home Loan Interest under Section 24(b) and Principal repayment under Section 80C can be claimed based on the ownership share and the actual payments made by each co-owner.
- There is no specific requirement that deductions must be claimed equally (50-50) if the payments and financial contributions are not equal.

2. **Changing Claim Percentage:**
- It is permissible to change the percentage of claim (from 50-50 to 100% in your case) based on the actual payments made by each co-owner.
- Given that you are solely paying the EMIs from your salary account and your wife has no income, you can claim 100% of both Interest and Principal repayments in your income tax return.

3. **Documentation and Support:**
- Ensure that you maintain proper documentation and records:
- Bank statements showing EMI payments from your salary account.
- Loan statements highlighting the payments made towards Interest and Principal.
- A revised agreement or understanding between you and your wife regarding the change in claim percentage, though this is not strictly required by the tax authorities.

### Practical Steps

1. **Prepare for Filing:**
- When filing your income tax return, declare the total Interest and Principal repayment amounts.
- Mention that you are claiming 100% of these deductions based on your actual payments.

2. **Consensus with Spouse:**
- It’s advisable to discuss and mutually agree on the change in claim percentage with your wife, even though legally you can claim 100% based on your contributions.

### Conclusion

Changing the claim percentage from 50-50 to 100% (in your favor) is legally permissible under Income Tax laws, considering your current financial arrangement where you are solely paying the EMIs. Ensure you have the necessary documentation to substantiate your claim in case of any future scrutiny by tax authorities. If in doubt, consulting with a tax advisor can provide personalized guidance based on your specific circumstances.

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