Housing loan tax benefit‎

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 March 2014 Sir,
My husband and I took a joint home loan for construction of house but plot got it registered in my husband name only. Both are salaried. My office refuses to admit my claim in full and their stand is that I am not eligible for claim. Please clarify and advise me how I would convince my office.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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18 March 2014 Even if your office refuses to entertain your claim, you have the right to make the claim in your tax return.

Querist : Anonymous

Querist : Anonymous (Querist)

18 March 2014 but sir plot registered in my husband name.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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28 July 2024 When dealing with tax benefits for a joint housing loan where the property is registered in only one spouse's name, there are specific rules and considerations. Here’s a detailed explanation of how you can address this situation and how to potentially convince your office:

### 1. **Tax Benefits for Joint Housing Loan**

**Eligibility for Deductions:**

- **Interest Deduction (Section 24(b))**: Both co-borrowers of a joint home loan can claim a deduction for the interest paid on the housing loan, up to ₹2 lakh each per annum, provided they are co-owners of the property.

- **Principal Repayment Deduction (Section 80C)**: Both co-borrowers can also claim a deduction for the principal repayment under Section 80C, up to ₹1.5 lakh each per annum, provided they are co-owners of the property.

### 2. **Ownership and Tax Benefits**

**A. Co-Ownership Requirement:**
- For both partners to claim deductions for principal repayment and interest, they must be co-owners of the property. Ownership is typically determined based on the name in which the property is registered.

**B. Property Registered in Only One Name:**
- Since the property is registered solely in your husband’s name, the Income Tax Act recognizes him as the owner. Therefore, for the tax benefits under Section 24(b) and Section 80C, only he can claim these deductions unless you are also a co-owner of the property.

### 3. **Handling the Office Claim Issue**

**A. Proving Co-Borrower Status:**
- **Loan Document Evidence**: Provide your office with documentation showing that you are a co-borrower on the home loan. This includes loan sanction letters, repayment schedules, and any official communication from the bank indicating that you are a co-borrower.

- **No Ownership, No Claim**: Despite being a co-borrower, without ownership of the property, the Income Tax Act does not allow you to claim deductions. Your office’s stance aligns with the regulations, as the tax benefits are tied to ownership.

**B. Legal and Tax Documentation:**
- **Document Submission**: Submit a copy of the property registration documents to your office showing that the property is in your husband’s name. This helps clarify why the tax benefits can only be claimed by the owner.

- **Consultation with Tax Professionals**: If your office is still not accepting your claim, consult a tax advisor or financial planner. They can provide a formal opinion and, if necessary, write a letter explaining why you cannot claim deductions based on the current registration status.

### 4. **Alternative Approach**

**A. Re-registering the Property:**
- If feasible, consider re-registering the property in both names to align with the joint home loan and claim deductions. This, however, involves legal procedures and potential stamp duty implications.

**B. Use of Income Tax Returns:**
- Ensure that both you and your husband reflect your respective claims in your individual income tax returns. Your husband can claim the full benefit, while you will not be able to claim any deductions related to the property unless you are a co-owner.

### Summary

1. **Tax Benefits**: To claim tax benefits on a housing loan, you must be a co-owner of the property. Since the property is registered solely in your husband's name, only he can claim the deductions.

2. **Proof to Office**: Present loan documents and the property registration to show the current ownership status. Highlight that tax benefits are linked to ownership and not just loan co-borrowing.

3. **Consult a Tax Advisor**: For additional support or clarification, consult with a tax advisor who can provide a formal explanation and assist in addressing any misunderstandings with your office.

4. **Property Registration**: Consider the possibility of re-registering the property if claiming tax benefits as co-owners is crucial for both of you.

This approach will help you address the issue with your office and ensure that you are in compliance with tax regulations.

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