Interest on housing loan
This query is : Resolved
08 May 2015
One of my clients (Mr. X) has salary income. His wife has got a site. She has availed a housing loan from a Bank with her husband as co applicant and constructed a house. Mr.X's wife doesn't have any taxable income. Mr. X is repaying housing loan (both principal & interest) from his salary.
Mr. X is admitting this as his property under INCOME FROM HOUSE PROPERTY and claiming interest payments as loss from house property and setting off against salary income and principle payments under section 80C. The assessing officer has refused to consider the above payments, as the house property is not in the name of assessee i..e. Mr.X. The A.O. says those payments are to be treated as loans to wife and Mr. X can"t claim deductions from his salary.
My query Is whether the claim of Mr. X is correct?. Please inform.
Mr. X is admitting this as his property under INCOME FROM HOUSE PROPERTY and claiming interest payments as loss from house property and setting off against salary income and principle payments under section 80C. The assessing officer has refused to consider the above payments, as the house property is not in the name of assessee i..e. Mr.X. The A.O. says those payments are to be treated as loans to wife and Mr. X can"t claim deductions from his salary.
My query Is whether the claim of Mr. X is correct?. Please inform.
08 May 2015
Prima facie the claim of Assessing Officer is CORRECT.
At the most, what one MAY argue is on the lines of % ownership e.g. 50% wife and 50% X
In such a scenario, the housing loan benefits viz 80C, loss from house property etc. can be claimed in the same proportion as that of ownership, subject to, however other restrictive provisions of Income tax.
At the most, what one MAY argue is on the lines of % ownership e.g. 50% wife and 50% X
In such a scenario, the housing loan benefits viz 80C, loss from house property etc. can be claimed in the same proportion as that of ownership, subject to, however other restrictive provisions of Income tax.
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