2nd house loan with wife

Tax queries 908 views 9 replies

Amit

Partner

88 Points Joined October 2012

# I have a home in Jamshedhpur for which I have taken loan of 5 Lacs. Today balance is 2Lacs to be paid. My Parents stay in the house.

# I have shifted to Kolkata and buying 2nd house for my work. I will take loan of Rs 26 Lacs. I will buy this home with my wife she will be co-owner and co-borrower and her first house.

# Bank is asking me to close the balance 2Lacs loan before they will sanction 26 Lacs loan.

My Few question are -

# Tax implication for my wife - 1.5Lacs on Intrest and 1 Lacs on Principal . Right ?

# Tax implicaton on me.

# For interest & principal payment can we decide on any such agreement that whatever money I pay from my Account I will take its advantange and whatever money she pays she will take its advantage on that money. I am not in favour of any ratio.

# How to make such agreement, on stamp paper?? Need to declare the agreement with Bank and Income Tax Department ??

# I have learned that 1 property to be choose as letout even if i have not rent it out ???

if yes then which property to choose ? Also how to find its rental value ? Its tax implication on me.

Also after my 2nd home loan is closed even then I need to choose 1 property as let out

Thanks

Amit

Replies (9)

Tanveer Md Masood

Indispensable

361 Points Joined July 2012

DEAR MR.AMIT,

AS PER SEC.295 OF THE COMPANIES ACT,1956 COMPANY CANNOT SANCTION LOAN TO THE WIFE OF A MANGING DIRECTOR WITHOUT PRIOR APPROVAL FROM THE CENTRAL GOVERNMENT. I AM NOT AWARE OF THE TAX IMPLICATIONS AND OTHER SUCH FORMALITIES FROM BANK LOAN. YES, IF YOU ARE A MANAGING DIRECTOR OF YOUR COMPANY THEN YOU CAN TAKE LOAN INFACT YOUR WIFE CAN TAKE LOAN PROVIDED CENTRAL GOVERNMENT APPROVES SUCH LOAN.

REGARDS,

TANVEER MD MASOOD

CALCUTTA.

Amit

Partner

88 Points Joined October 2012

first of all I am not a Director in any co. Next my wife is salaried. I am taking loan from Bank.

Thanks

VIJAYKUMAR

CHARTERED ACCOUNTANT

203 Points Joined August 2007

Yes.You can go for second home loan.

Amit

Partner

88 Points Joined October 2012

Hi Vijay,

I know I can go for home loan. Please see my question above.

Thanks

Amit

Manjunatha M K

Manager - Accounts

318 Points Joined November 2007

1. Tax benefit of Rs.1.5Lacs of interest and also Principal Repayment of Rs.1 Lac is available to your wife also for you (Because These limits are per person not per property).

2. Same Rs.1.5 Lac & 1 Lac Benefit available to you also.

3. Share of property should be definite (Like 50:50 or 30:70 etc) Because person should be owner for his/her Share of Property.

4. Making agreement I have no Idea. I think at the time of Purchase of Property You should mention the share in the Sale deed.

5. Yes you have declare one House as deemed letout. For the purpose you have to find out rent for similar property in respective location of the property (Approximate will do) for both property. Then calculate Income of both the Houses. Which property has less income you can declare that property as deemed letout other property as self occupaid. This selection can be done for every year.

6. Yes. Even after closing the House loan you have declare deemend letout.

I think you problem is solved.

Amit

Partner

88 Points Joined October 2012

Thanks for reply, I have few more question

# This will be my 2nd loan, so will i get 1 Lac Benefit on principal ??

# Share of property can be (51:49 or 55:45) ???

# The amount need to pay be me & my wife need to be in same ration ???

# the flat i am looking to buy is under construction. In that case after possession I need to declare one House as deemed letout ??

# The Rent which I show as letout what rebate I will get on that loan.

Any other member can help me -

# How to make such agreement, on stamp paper?? Need to declare the agreement with Bank and Income Tax Department ??

Manjunatha M K

Manager - Accounts

318 Points Joined November 2007

# The maximum Rs.1 Lac benefit is including your PF, Life Insurance, Housing Loan Principal Repaymet (Both the Houses)

# Percentage of Share can be as per your wish (It cannot be changed afterwards). But share of owner ship must be mentioned in your Purchase Deed.

# Yes both should pay for their share. If you both open a Joint account for the purpose and pay from that account and you can reconcile your payable peridically.

# Yes you should declare Deemed let out only after you get the possession.

# If Property is Taxed as deemed to be letout, Sec 80C benefit available on Principal Repayment (refer first point to this above). And you get deduction for Municipal Taxes Paid, And a standard deduction 30% and Whole Interest Paid on Loan can be availed (No restriction of Rs.1.5 Lacks)

# There is no need to Submit any share of property agreement with Income Tax department (Bank I am not sure, Please inquire with bank). If share of ownership mentioned in your Purchase deed will be sufficient. And your wife also should pay towards Purchase consideration for her share.

Amit

Partner

88 Points Joined October 2012

Let say my loan is closed, I paid 1,43,000 as Intrest for the period 5 year of my loan.

then and let say I am getting 3K as Rent that is 36K yearly

36K - 10.8K As standard deduction = 25.2K Will I get any advantage on 1,43,000 which i combinedly pay in previous year