A residential flat (which is NOT being used for business) is jointly owned by husband and wife in 50-50 share. The down payments and EMI s are being paid from a separate bank account where they both are contributing equal amount on the same date. The Flat, Bank Account balance as well as the outstanding home loan is reflecting in their respective balance sheets at 50% of apportioned value. I would like to know,
1. If the above system is legal ? I mean splitting the value of the asset and liability in 50-50 ratio and reflect the same onto both balance sheets ?
2. Is that flat eligible to incur depreciation ? If yes, is it 5% or different ?
3. Is there any clause for the date of registration of the property related to charge depreciation (if any) ?
Early responses from the learned members in easy words apart from double entendres are highly appreciated.
THANKS
CAclubindia
