Co-owner, co-borrower, rental income & loan repayment


Suraj   11 July 2019

Suraj

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Dear All,

My question is as follows:

Mr. A & Mrs A have jointly purchased a property X. Mr. A is salaried person with 30% tax bracket whereas Mrs A is house wife with no income. They have rented this property X (full rent Rs. 3 lakhs) against which there is home loan in which Mrs A is also Co-borrower. All installments are paid by Mr A only from the beginning of the loan. Interest Rs. 3.18 lakhs & Principal Rs. 2.30 lakhs.

Now, the question is: whether  Mr A can claim entire home loan interest and principal?? As per IT Act provisions, we need to show Mr A & Mrs A as 50%:50% owner in ITR. So the rent will get divided between them (To Mr. A rent will be Rs. 1.50 lakhs). But since all the installments are paid by Mr A, can he show this entire interest & principal in his ITR? Then it will negative house property Income as the rent will be 50% and entire Interest on Home loan will be adjusted.

or

he can claim 50% interest & principal only?

Kindly guide,

Suraj 

 

 

 

 

 

 

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Jatin (Accountant)     11 July 2019

Jatin
Accountant 
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Mr. A claim all deduction as per rule against home loan (All EMI paid by Mr A)

Mrs. A not entitled to claim any deduction

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rama krishnan   11 July 2019

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since husband and wife have 50% ownership, only 50% of principal repayment and interest to be claimed husband and rest by wife.
d
correct me if I'm wrong

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Mujeeb rahuman (Audit assistant)     12 July 2019

Mujeeb rahuman
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s
correct.
both of them can / should be claim 50% of principle and interest u/s.80c & 24 b.
even mr.A paid whole amount.

but Mr.A capital account shud be dr share of Mrs.A as gift or Dr in assets as loan & adv

Suraj   12 July 2019

Suraj

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@ Jatin @ rama @ Mujeeb thanks for reply.

In ITR we have to mention co-owners share in property and gross rent received and it automatically divided the rent between two co-owners. We can not show entire rent against Mr A since he is also claiming entire home loan interest & principal.

Since Mrs A can not claim tax benefits of housing loan interest & principal, then whether housing rent received should be shared or not?

Kindly revert.

Thanks,

Suraj 

 

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Mujeeb rahuman (Audit assistant)     12 July 2019

Mujeeb rahuman
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subhagan sreerangam   04 August 2019

subhagan sreerangam

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good clarification and information

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RAMAKRISHNAN R (INCOME TAX OFFICER)     04 August 2019

RAMAKRISHNAN R
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Mr. Suraj, if both husband and wife are co-owner as well as co-borrower , whatever receipts received or expenses incurred should be apportioned according to their shares in the property

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