House Property Co Owner Loan Benfit

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Amol (Querist)
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19 July 2008 Dear Expert(s),
My father has been alloted a flat by a co-op Hsng socy and that is the leagal ownerhip in this case. We have availed a home loan where i m co-borrower. My father has contributed to the extent of 40% of cost and rest is funded by way of a loan where I will be practically paying the whole of EMIs. Since i m not a co-owner i propose to receive some share in the house property from my father as gift. I propose to receive a nominal share as gift, as higher share would entail higher stamp duty payment. Now my questions are as under:

1) Will such gifting certain share by the owner (father) to me (Son), without adequate consideration, will create co-ownership in my favour.

2)Will any inter-se agreement where the Owner recognises me as co-owner with definite share say 60% and relinquishes his right to claim house loan deduction,executed on a 100/- (or Rs.200/- as an affidavit) stamp paper will create ownership in my favour?

2) For claiming deduction u/s 80 C as well as u/s 24, will my deduction be restricted to my share in property or it will be max. Rs.1,00,000 for principal and Rs. 1,50,000 for interest ?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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19 July 2008 1.It will create ownership provided the provisions applicable under Transfer of Property Act have been complied with.
2. If TP Act has been observed ownership is recognised
3.Your actual contribution is eligible subject to the maximum u/s 80C.

Amol

Amol (Querist)
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19 July 2008 Thanks Mr. Srinivasraghvan,

Can u pls. elaborate on TP Act compliance?

3) Just to clarify, even if i own 10% share in property, still i can claim my actual repayamnet subject to limits mentioned u/s 80 C and u/s 24 ?

K V Subba Rao

K V Subba Rao (Expert)
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19 July 2008 I would suggest you better consult an Advocate.

It however appears to me that you would become owner of the property to only to the extent of share relinquished by your father.

Sharing as per Transfer Deed only will be considered for Income Tax purpose and any private arrangement will not work.

For Sec 80-C purpose, you will be eligible to claim benefits proportionately for your share subject to maximum limits of Rs 100000 and Rs 150000 (These limits are seperate for each owner and not for all owners puttogether

I also suggest you visit www.apnaloan.com in which you find answers to several FAQs on the subject of Home Loan etc.

Amol

Amol (Querist)
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26 July 2008 As reagrds Q 3 of my Querry, the answer of Mr. Srinivas and Mr. Subba Rao are contradictory. This has confused me. Kindly clarify the matter as to whether the benefits u/s 80 C and sec. 24 are governed by actual contribution or by share in the property. PLZZZZ Guide me...