Dear Professionals,
I need your expert advise on specific concerns.
Background:
A property was purchased in March 2017 in the name of my mother and wife. Loan was taken from Indiabulls for INR 30 lacs, with Loan sanction letter dated 31 Mar 2017 (mother & wife as co-borrowers).
In Jan 2019, ownership was changed with builder to remove mother and add me as the co-owner. The formalities were completed and closed with revised docs sent to Indiabulls for further action at their end. I assume Indiabulls made changes in their records in March / April 2019, though we did not receive any confirmation. But the updated LOD did reflect the new list of documents.
In June 2019, we switched from Indiabulls to SBI.
This is the only property in any of our names. Offer of possession received from builder dated 4 Mar 2019, registry not yet completed by us.
Cost of property:
2017 (Pre-GST)
Property cost (incl. IFMS, meter charges): INR 39,20,776
Service Tax: INR 1,77,845
Total Cost: INR 40,98,621
2019 (Post-GST)
Property cost (incl. IFMS, meter charges): INR 39,20,776
Goods & Services Tax: INR 3,23,673
Total Cost - INR 42,44,449
Questions:
1. Since Offer of Possession has been received in March 2019, are we eligible to take advantage of home loan exemptions?
2. Am I eligible for claiming tax exemption for the period Apr 2017 to Mar 2019?
3. Since the cost of property (excl. taxes) is less than 40 lacs, will this house be treated under "Affordable housing" from Income tax perspective?
4. For the period home loan was with Indiabulls, EMI used to get deducted from my wife's savings account. My mother never had contribution to the EMIs. Can my wife make claim for 100% of interest paid under section 24?
5. With transfer of loan to SBI, EMI is being deducted from savings account jointly owned by me and my wife. Will we both be eligible for tax deductions in equal proportion (50:50) or can this be changed? If yes, is there need to be any documentary proof?
6. We are planning to put this property on rent. Does this imply we are eligible for claiming tax deduction under section 24 without any limits?
7. Regarding impact of GST on me, the government mentioned that the benefits would be passed on to the consumers and that there would be no impact on the end user. In this case, the builder has increased the net price to me as a result of increase in Tax due to GST. He has not passed on the benefit to me, what is the recourse available with me.
Looking forward to your expert opinions, appreciate your responses.
Thanks a ton in advance.
Best Wishes,
Vineet
CAclubindia
