house property

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shirish nagchandi (Querist)
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10 December 2009
case 1 An employee has purchased a house jointly with his wife , first name is of his wife, he wants to claim whole interest deduction from his salary,since his wife is not a tax payer.can such deduction be given ?

case 2 an employee took housing loan from our office and never claimed interest deduction from salary.now after payment of housing loan( after 10 years) he has also paid the interest in lumpsum. can he claim whole deduction in the year of payment ?

PL. reply alongwith provision and decided court cases.

K V Subba Rao

K V Subba Rao (Expert)
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10 December 2009 Case-1: "Both can enter into a share agreement, indicating the respective shares in the property and the loan." Visit https://www.apnaloan.com/home-loan-india/deductionbenefitstocoowners.html

Case-2:
While I was in service of a PSU, as per the terms of Loan, Employer recovered certain amount every month and appropriated it towards Principal. Interest accrued was deducted in instalments AFTER completing Principal recovery. Yet the Management was calculating ACCRUED INTEREST every year and giving me Certificate based on which I claimed Expenditure u/s 24. This procedure should have beeen followed based on logic that technically Interest accures on outstanding Principal every year. Physical recovery of Interest after completing principal recovery is only for convenience sake etc as per House Loan Terms & Conditions

In the instant case, you reported that the Employee did not claim Expenditure u/s 24. I think the only way for him is to submit revised Returns subject to provisions governing revision of Returns already filed.

As far as assessment for latest year is concerned, I think he can only claim interest relating to the latest year only but not interest relating to previous years

shirish nagchandi

shirish nagchandi (Querist)
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10 December 2009 the reply no 1 is not clear. can office give whole interest rebate to one of the joint holder of the property.

K V Subba Rao

K V Subba Rao (Expert)
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11 January 2010 May not be possible and any attempt to give credit for whole of interest to only one of the joint owners would be viewed with suspicion by the ITO.

Any sharing agreement should be such that those who execute it have necessarily be able to justify the sharing pattern

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