Housing loan deduction issue

Tax queries 2242 views 8 replies

Raman

Salaried

78 Points Joined December 2007

Hi Gurus,

Can you through some light in this situation.

Facts

1) Housing Loan taken by two brothers jointly in ratio of 50:50 during PY - 2008-09.

2) Possession for property taken in PY - 2008-09 itself.

3) Loan repayment made by one brother only as of now. Starting Apr-09 both the brothers will repay the loan jointly.

Question - For PY - 2008-09

A) Whether both the brothers can claim interest deduction in the ratio of 50:50?

B) Or only the person paying is eligible for deduction?

Pls clarify.

TIA

Replies (8)

CA Gaurav Gupta

Practice

307 Points Joined June 2008

deduction in respect of int. will be availabel to both u/s 22 since the property is self occupied.(income U/H house property)

deduction for the repayment of principal amt U/S 80C will availabel to one brother who will make Repayment.

FOR DETAILS PLEASE REFER RESPECTIVE SECTIONS.

Originally posted by :Raman

Hi Gurus,
Can you through some light in this situation.
Facts
1) Housing Loan taken by two brothers jointly in ratio of 50:50 during PY - 2008-09.
2) Possession for property taken in PY - 2008-09 itself.
3) Loan repayment made by one brother only as of now. Starting Apr-09 both the brothers will repay the loan jointly.
Question - For PY - 2008-09
A) Whether both the brothers can claim interest deduction in the ratio of 50:50?
B) Or only the person paying is eligible for deduction?
Pls clarify.
TIA

Raman

Salaried

78 Points Joined December 2007

Can IT officier deny deduction regarding intt due to the fact that loan repayment is made by one brother only?

CA Rajesh S

Chartered Accountant

1581 Points Joined July 2007

u have mentioned that the loan is taken 50 : 50, what about the ownership? is it also 50:50 between the brothers ?

the deduction always depends on the ownership

Raman

Salaried

78 Points Joined December 2007

Ownership is also 50:50

Sagar Kapoor

Chartered Accountant

34 Points Joined June 2008

Hi,

The deduction is based on ownership only.

In this case the deduction of Rs 100000 under sec 80 will be apportioned between both the brothers in the ownership ratio ie 50:50.

And the deduction of Rs.150000 under section 24 for the interest amount will be available for Rs 1.5L for both the brothers individually.

Thanks!!!!

Mahendra

Chartered Accountant

53 Points Joined October 2008

Originally posted by :Raman
"	Hi Gurus, Can you through some light in this situation. Facts 1) Housing Loan taken by two brothers jointly in ratio of 50:50 during PY - 2008-09. 2) Possession for property taken in PY - 2008-09 itself. 3) Loan repayment made by one brother only as of now. Starting Apr-09 both the brothers will repay the loan jointly. Question - For PY - 2008-09 A) Whether both the brothers can claim interest deduction in the ratio of 50:50? B) Or only the person paying is eligible for deduction? Pls clarify. TIA	"

only the person who is paying interest is allowed to take deduction on such interest amount actually paid. So this deduction is on payment basis. If only one brother pays the interest he allowed to take duduction proportionately on his loan amt (i.e.50%)

praveen

Chartered Accountant

6971 Points Joined September 2007

Originally posted by :Mahendra
"		"

Interest can be claimed as deduction in 50:50. As interest is allowed as deduction on accrual basis and not on payment basis.

Ashish M

Chartered Accountant

2731 Points Joined January 2008

IN the above query,.

Both the persons can claim the interest whether the second brother has started paying the interest or not...as the ACt uses the words "the amount of any interest 'payable' on such capital".

And as for the amoutn of deduction they are enhtitled to have; Explanation to Sec.26 clearly provides that in case of co-ownership, each person shall be individually assessed for the relief for his portion only....

hence each of the brothers shall be entitled to have a deduciton fo Rs.150000