01 September 2007
Sir, my brother has been taken a house property loan on the house of our father. The house is in the name of our father. So father become co owner for the loan. As bank told us that you cannot apply alone. This loan is in the nature of renovation & repairs intt. limit is Rs.35000. Bank create a loan account and we with draw money from that account. So at the time of filing Return If my father will not take 50% of interest part in his Return can my brother will take the 100% of interest in his return to reduce tax liability. As my brother has been paying all the EMIs. As property is not in the name of my brother even not jointly with our father is there any chance of disallowing interest inbrother's Return Please advice. deb4865@gmail.com ca.deb2006@icai.org Regards, CA.Deb.
03 September 2007
As per the IT act only the owner of the house can enjoy the interest and principal repayment deductions.Hence your brother cannot enjoy income tax benefits. One solution is to gift the house property to your brother and your brother can claim deductions as the owner of the property.
CAclubindia
