Please suggest me regarding following.
My Father own a land ,I have taken a personal loan for construction of house on that land and repaying the same in EMI's .Wheather Iam eligible to claim deduction under Sec 80C for my principal repayments.
CA.Varalakshmi.M (Manager-Finance) (482 Points)
24 February 2012Please suggest me regarding following.
My Father own a land ,I have taken a personal loan for construction of house on that land and repaying the same in EMI's .Wheather Iam eligible to claim deduction under Sec 80C for my principal repayments.
Anumanchipalli Sathikonda
(Tax Consultant)
(1349 Points)
Replied 25 February 2012
Ms.M.Varalakshmi Gaaru (Amma hope you are a telugu lady)
The deduction of repayment of housing loan installments is placed in clause (xviii) of sub-section (2) of section 80C. Nowhere in the clause the words "persons specified in sub-section (4)" are used.
In other clauses such as clause(i), (ii), (v), (x), (xi) and (xvii) etc., the said words are used. You are aware in sub-section (4) the persons other than the individual assessee are i.e. spouse of the assessee, child of the assessee and in the case of HUF assessee any member of the HUF are specified.
In your case the house belongs to your father. you are paying the installment of principal amount of house loan. Hence you are not eligible to claim the repayment of installments of housing loan as a deduction from your gross total income u/s 80C.
Best Wihes
Sathikonda
CA.Varalakshmi.M
(Manager-Finance)
(482 Points)
Replied 25 February 2012
Dear Sir,
Thanks for your reply and fortunately Iam a Telugu Lady.
No where in the section mentioned that House should be registered in the name of the person who has taken loan and paying installments.
If my father doesnt have any income,I can take housing loan and I can pay installemnts and might be I can claim deduction U/s 80C
Please confirm me regarding this.
And I have one more doubt regarding interest.
If we take a Joint loan and paying installemnts jointly for a self occupied property,Can both of us claim 150000/- deduction of interest each.
Anumanchipalli Sathikonda
(Tax Consultant)
(1349 Points)
Replied 25 February 2012
Ms.Varalakshmi Gaaru
You are claiming deduction u/s 80C. The conditions laid down for claim of deductions are -
(1) the impugned payment should be for the assessee himself/herself
or
(2) the impugned payment should be for the benefit of the persons specified in sub-section (4) of Section 80C.
Hence the question of ownership of the house is not to be considered.
Best Wishes
Sathikonda
p.s. Amma, regarding deduction of interest for housing loan I shall clarify latter.
Anumanchipalli Sathikonda
(Tax Consultant)
(1349 Points)
Replied 25 February 2012
Ms.Varalakshmi Gaaru
Please refer to Section 22 of Income-tax Act, 1961 - the opening of the said section is as follows:
"The annual value of the property consisting of any building or lands appurtnant there to of which the assessee is the owner--"
Now please refer to section 24- the heading of the section is -DEDUCTIONS FROM INCOME FROM HOUSE PROPERTY-
"Income chargeable under the head "income from house property" shall be computed after makiing the following deductions, namely:-
and also refere to Section 27 -"OWNER OF HOUSE PROPERTY", "ANNUAL CHARGE", ETC., DEFINED.
on going through the above sections you will come to know that you are not the owner or even a co-owner of the house property. Hence you are not eligible to claim the deduction of payment of interest u/s 24 of the Income-tax Act.
Best Wishes
Sathikonda
p.s. Amma Co-Owners can claim the deductions.
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