Housing loan deductions in case of co-owners

Tax planning 531 views 6 replies

CA PARTH SHAH

In Practice

1951 Points Joined December 2009

If A & B are co-owner and co-borrower of a residential property. They are equal co-owners However all the EMI of the housing loan taken are paid by Mr A only. B do not contribute in loan repayment. Can Mr A claim full benefit u/s 80C and 24(b) of the income tax? Is there is any provision in the Act which says that deduction can be claimed only by the co-owner who repays the loan? In other words whether it is true that claim of deduction is linked visa-vis repayment of loan?

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Replies (6)

shivaji prasad bhimavarapu

CHARTERED ACCOUNTANT

2391 Points Joined March 2012

Principle repayment is the criteria for claim of deduction. So Mr A will get 80 C exemption

S. Shiroor

Others

1212 Points Joined July 2015

If Mr A is servicing the LOan repayment - he is the beneficiary of Principal u/s 80C and u/s 24 the int part.

Ashok J

CA Final

880 Points Joined December 2009

Im 100 percent sure B cn claim int portion even though he has not paid any amt....but as regards principal i think A can claim full dedn...

CA Vap Patel

Practice

1205 Points Joined June 2011

You have to show it as Mr A is paying on behalf of Mr B. So you have to show it as Mr B will pay to Mr A in future. Hence by showing it as loan you can claim deduction u/s 80C and under 24b too. But make sure that Mr B repaid the same to Mr A. Otherwise in scrutiny scenario deduction may get disallowed.

Manish Mehta

Manger

115 Points Joined March 2010

Yes both can claim under 24 max 150000 each subject to interest payment of 3lacs or more. 80c is available to both 50 : 50 but if any one wish to claim full he should get letter from other that he will not claim exception under 80c

Miss Rinkal

Student

1309 Points Joined January 2009

A can claim full benefit within the limits specified u/s24(b) and sec 80C and 80EE.

Interest u/s 24(b) is on accrual basis. But repayment of loan U/s 80C is on payment basis.

However for B, it wouldn't be correct to claim interest u/s 24(b) as it states that paid or payable whereas in the given case B isn't paying only. And wrt 80C since it is on payment basis, no question of claiming it. However wrt 24(b), it can be done as B is paying to A or payable and then can claim deduction u/s24 (b). In that case it will be considered as a loan.