14 September 2007
Facts 1. The property is in the name of Mr.X 2.The property is leased to Mr. X's company and Mr.X stays there under Lease agreement with Mrs.X 3. The Rental is paid in the name of Mrs X with Form 16A TDS deduction. 4. House property Income is assessed in the name of Mrs.X with deduction being taken for Interest on Housing loan sanctioned in Both Mr.X and Mrs.X's name.
Can the Interest on Housing loan paid be claimed by Mrs.X.
14 September 2007
I feel it can be done as the loan is in both names and the income derived can be from any employee in Mr.X's Company if Mr. X is transferred and siuch interest is an outflow to earn the HP income.
First of all, how Mrs X can get rent while the property is in the name of Mr X? Deemed owner concept mentioned under Section 27 of the Income Tax Act 1961 will have to be applied.
If there is joint ownership please halve the income and claim respective share of loan.
If not treat proportionate rent to Mrs X as amenity charges (if applicable). Any how, please ensure that the legal owner of the property shows income in his returns.
CAclubindia
