Housing loan deduction
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 November 2011
The father & son are co-borrower for the purpose of Housing loan.The loan has been taken for improvement & reinnovation of the house. The House is in the name of father & he is the registered owner of the house. The loan installments are being paid from the income of the son. Can the son claim the interest & housing loan principle deductions? or the deduction has to be claimed equally ?..... Please advise.
13 November 2011
1. 80C is allowable for the purpose of construction or purchase of a residential house. Once the construction is completed, or completion certificate is issued, and subsequently, renovation or improvement is carried on deduction U/s 80C is not allowable in respect of the loan repaid.
2. However, interest is allowable by virtue of Section 24(b) and it is allowable on accrual basis and not on payment basis.
.
3.In case of co-borrowers, deduction can be claimed on the basis of a certificate issued by the lender, which includes the names of the co-borrowers and not the name of the person who is paying the interest.
The Loan and interest liability is considered joint at the first instance.
.
4. So, it seems logical that, in-spite of the fact that only son has repaid, father is also eligible to claim the interest expenditure. In other words son alone can not claim the interest .
2. However, interest is allowable by virtue of Section 24(b) and it is allowable on accrual basis and not on payment basis.
.
3.In case of co-borrowers, deduction can be claimed on the basis of a certificate issued by the lender, which includes the names of the co-borrowers and not the name of the person who is paying the interest.
The Loan and interest liability is considered joint at the first instance.
.
4. So, it seems logical that, in-spite of the fact that only son has repaid, father is also eligible to claim the interest expenditure. In other words son alone can not claim the interest .
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