Regarding housing loan its accounting treatment
This query is : Resolved
25 November 2011
Hi.....
Good Morning....
I have one query regarding Housing Loan and deduction u/s 80 C and
Interest of Housing loan repayment under the head of House Property
with self occupied House,
Matter,
My client has taken a housing loan form Bank for Rs. 20 Lacs, in the
name of his wife and himself as a co-applicant. Sale Deed has made in
the name of his wife only due to the benefit of Registration fee. Now
whether deduction u/s 80 C will be available to husband on the basis
of co-applicant and Interest deduction under House Property Head.
What is Accounting Treatment in the Books of Husband - Whether he
mention half portion of loan in the liabilities side. than Assets side
what is mention. Also suggests me about subsidies procedure for
housing loan.
Good Morning....
I have one query regarding Housing Loan and deduction u/s 80 C and
Interest of Housing loan repayment under the head of House Property
with self occupied House,
Matter,
My client has taken a housing loan form Bank for Rs. 20 Lacs, in the
name of his wife and himself as a co-applicant. Sale Deed has made in
the name of his wife only due to the benefit of Registration fee. Now
whether deduction u/s 80 C will be available to husband on the basis
of co-applicant and Interest deduction under House Property Head.
What is Accounting Treatment in the Books of Husband - Whether he
mention half portion of loan in the liabilities side. than Assets side
what is mention. Also suggests me about subsidies procedure for
housing loan.
27 November 2011
1.Since house is registered in the name of the wife, the benefit of 80C & 24 will be availaible to wife.
The clubbing provisions doesnt apply to the above case.
2.Accounting treatment in the books of husband
Loan to wife A/c Dr
To Bank A/c
No assest will be created in the book of husband.
The clubbing provisions doesnt apply to the above case.
2.Accounting treatment in the books of husband
Loan to wife A/c Dr
To Bank A/c
No assest will be created in the book of husband.
29 November 2011
But in this case loan taken by husband so criteria of 80C is not fulfilled by wife so confirm me whether she will take deduction or not. Criteria is that, if loan taken from financial Institution than deduction will be taken.
29 November 2011
But in this case loan taken by husband so criteria of 80C is not fulfilled by wife so confirm me whether she will take deduction or not. Criteria is that, if loan taken from financial Institution than deduction will be taken.
29 November 2011
But in this case loan taken by husband so criteria of 80C is not fulfilled by wife so confirm me whether she will take deduction or not. Criteria is that, if loan taken from financial Institution than deduction will be taken.
20 July 2025
Let's break down your query step-by-step for clarity regarding the housing loan, tax deductions, and accounting treatment:
1. Who can claim deduction under Section 80C and Section 24 (Interest) — Husband or Wife?
Section 80C (Principal repayment deduction) and Section 24(b) (Interest deduction on housing loan) are generally available to the person who is the owner of the property and who has taken the loan from a financial institution for purchase/construction of that property.
In your case, the property is registered in the name of the wife only.
However, the housing loan is taken by the husband as the primary borrower and the wife as co-applicant.
Important: The deduction depends on who is the legal owner and who is paying the loan installments, not only on who took the loan.
Since the wife is the registered owner, she is eligible to claim deductions, provided the loan is taken for the property owned by her.
The fact that the loan is taken by the husband with the wife as co-applicant means the wife can claim deductions on her income tax return if she repays the loan or if the loan repayment is made from her funds.
If the husband repays the loan from his own income and the property is in the wife’s name, then the principal and interest paid by the husband can be claimed by the wife, assuming the loan is taken for the property owned by her.
Clubbing provisions under income tax might apply if the husband claims deduction but the property belongs to the wife, and vice versa. However, in this case, the clubbing provisions generally do not apply if the wife is co-applicant and owner.
2. Accounting Treatment in Husband’s Books
Since the house is in the name of the wife:
The asset (house property) belongs to the wife, so it should be recorded only in the wife’s books, not in the husband’s books.
In the husband’s books, since he is a co-applicant but not owner, the housing loan liability does not create an asset for him.
Loan taken by the husband for the wife’s property can be recorded as “Loan to Wife Account” in husband’s books.
So the accounting entry in the husband's books would be:
Loan to Wife A/c Dr
To Bank Loan A/c (Housing Loan)
This means the husband recognizes a loan liability but treats it as a loan to his wife, as the asset belongs to her.
3. Subsidies Procedure for Housing Loan
Subsidy schemes (like CLSS under PMAY - Pradhan Mantri Awas Yojana) depend on eligibility and income criteria.
The subsidy is generally credited directly to the loan account by the lending institution, reducing the loan principal and interest burden.
For subsidy, the property and loan documents should be in the name of the applicant.
You need to check with your lending bank or housing finance company regarding the specific subsidy schemes available and their application procedures.
1. Who can claim deduction under Section 80C and Section 24 (Interest) — Husband or Wife?
Section 80C (Principal repayment deduction) and Section 24(b) (Interest deduction on housing loan) are generally available to the person who is the owner of the property and who has taken the loan from a financial institution for purchase/construction of that property.
In your case, the property is registered in the name of the wife only.
However, the housing loan is taken by the husband as the primary borrower and the wife as co-applicant.
Important: The deduction depends on who is the legal owner and who is paying the loan installments, not only on who took the loan.
Since the wife is the registered owner, she is eligible to claim deductions, provided the loan is taken for the property owned by her.
The fact that the loan is taken by the husband with the wife as co-applicant means the wife can claim deductions on her income tax return if she repays the loan or if the loan repayment is made from her funds.
If the husband repays the loan from his own income and the property is in the wife’s name, then the principal and interest paid by the husband can be claimed by the wife, assuming the loan is taken for the property owned by her.
Clubbing provisions under income tax might apply if the husband claims deduction but the property belongs to the wife, and vice versa. However, in this case, the clubbing provisions generally do not apply if the wife is co-applicant and owner.
2. Accounting Treatment in Husband’s Books
Since the house is in the name of the wife:
The asset (house property) belongs to the wife, so it should be recorded only in the wife’s books, not in the husband’s books.
In the husband’s books, since he is a co-applicant but not owner, the housing loan liability does not create an asset for him.
Loan taken by the husband for the wife’s property can be recorded as “Loan to Wife Account” in husband’s books.
So the accounting entry in the husband's books would be:
Loan to Wife A/c Dr
To Bank Loan A/c (Housing Loan)
This means the husband recognizes a loan liability but treats it as a loan to his wife, as the asset belongs to her.
3. Subsidies Procedure for Housing Loan
Subsidy schemes (like CLSS under PMAY - Pradhan Mantri Awas Yojana) depend on eligibility and income criteria.
The subsidy is generally credited directly to the loan account by the lending institution, reducing the loan principal and interest burden.
For subsidy, the property and loan documents should be in the name of the applicant.
You need to check with your lending bank or housing finance company regarding the specific subsidy schemes available and their application procedures.
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