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Deduction of interest on joint housing loan

05 June 2016

A flat is in the name of Wife. A loan is taken in joint name of wife & husband. Repyment of loan is by both. Dedduction of interest on housing loan of Rs.1.5 lacs is claimed by wife only. Whether wife will get full deduction?

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6 Replies

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 05 June 2016

Who has paid the consideration for house property?

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Ruchi (CA) (1410 Points)
Replied 05 June 2016

Since the repayment of loan is made by both , the wife will get deduction upto the amount of contribution which is made by her and not exceeding the limit specified in the Act.

Moreover since the husband is not co owner of flat, he wil not get any deduction.

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 06 June 2016

Agree with Ruchi.

A co-owner, who is not a co-borrower, is not entitled to tax benefits.

Similarly, a co-borrower, who is not a co-owner, cannot claim benefits.

pooja (nothing) (47 Points)
Replied 08 June 2016

Disagree with Ruchi,

As the contribution is made by both i.e. husband and wife, husband is also a co-owner in the property even though the property is registered in wife's name only. Further, on the basis of declaration made by husband , wife can claim full deduction on account of Interest i.e. 2 lakh (FY 2015-16).

Ruchi (CA) (1410 Points)
Replied 08 June 2016

@ pooja

Making a contribution towards home loan or being a co borrower in home loan doesnt automatically makes the husband a co owner of the property. Any declaration is also of no relevance here then.

Yes you can say that since the husband is making contribution towards the repayment of loan of wife's property, the proportionate contribution shall be considered as gift from husband to wife and related consequences of clubbing etc follow, but the husband is still not a co owner of property.