Co-applicant in Home loan

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This discussion clarifies the tax treatment for a daughter who is a co-applicant on a home loan, while her father is the sole owner of the property. It explores whether the daughter can claim tax benefits on loan repayment and interest, or capital gains exemption if the property is sold. The key takeaway is that for capital gains exemption under Section 54, both the father and daughter must be joint owners and co-applicants, as per ITAT Ahmedabad ruling.

Meghna

Meghna (Querist)
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21 July 2021 If Father purchase Property and he is the owner of property and Daughter is only Co-applicant for Home loan then what would be tax treatment in hands of daughter when property gets sold in future . is daughter gets tax benefit for repayment of loan and interest component .

Or Father can get benefit u/s sec 54 (Old property sold )for in case Property is in name of Daughter.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 July 2021 Only father gets tax benefits as he is the owner of the property.
No, property should be purchased in father's name. Can be purchased in joint names.

Shri Chitrang M. Dave Vs DCIT (ITAT Ahmedabad)
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the benefit of capital gain exemption under Section 54 of the Income Tax Act, 1961 cannot be denied to a joint owner who made the total investment in the purchase of the property.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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23 July 2021 For claiming benefit by daughter, both daughter and father are required to be joint owner of house and co-applicant in home loan. Any one condition do not suffice to claim exemption by both.

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