Interest on let out property co-owned

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Sunil (Querist)
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09 January 2011 Hi,

Request advice:

Say, I (A) have a property that's co-owned with B & C, and our ownership share isn't mentioned on the regsistered Agreement of Sale. Now, this property is let out say for Rs. 9,000/- p.m. for 10 months, and I (i.e. A) am repaying entirely a loan thats taken to finance the property. Say the Interest for the FY comes to Rs. 75000/-. Is my share of the loss from the property Rs. 54,000/- [(90,000/3*0.70)-75,000], while B and C are taxed on property income of Rs. 21,000 each? Am I right in assuming this?

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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10 January 2011 Since respective shares of the co owner are not definite and ascertainable, income will be taxed in the hand of person receiving the rent.

However, A will get full deduction of interest paid by him.

Vivek Raju P

Vivek Raju P (Expert)
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10 January 2011 no you cannot claim the interest expense in full and offer only a proportionate share of income.

Your interest expense should also be on the lines of the share of income.

K V Subba Rao

K V Subba Rao (Expert)
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10 January 2011 In the absence of specific allocation of share in the Title Deed, the property is supposed to be owned by all three in equal proportion. So I opine that only 1/3rd of Rent and 1/3rd of Interest should be considered for tax purpose in the assessment of Mr A

Sunil

Sunil (Querist)
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10 January 2011 Thanks, friends. Believe though that there is no clause that stpulates the splitting of income tax benefits. So, in perspective, am I not eligible to claim the entire interest amount paid by me as an IT benefit?