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Income tax deduction for home loan

CA Ankit Agarwal (CA, CS) (688 Points)

14 December 2017

If a person buys a flat and gets it registered in the name of his wife, will he get Tax deduction?

Note: Loan is taken by the husband, and he will be paying the EMI. The wife does not have any source of income.

He wants to get the flat registered in name of his wife to save the stamp duty which are available to a woman.

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6 Replies

Prajjwal Kaushik (Finance Professional) (6216 Points)
Replied 14 December 2017

In my opinion, that is not possible.

You and your wife will have to be co-applicants for the loan.

If you are neither the owner nor the co-owner of the apartment, you will not be eligible for any tax benefits on the loan repayments.

Even if you become the co-owner of the flat and co-applicants for the loan, in that case also deduction shall be restricted to the share in the property.

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CA Ankit Agarwal (CA, CS) (688 Points)
Replied 14 December 2017

Thank you.

Is there any way out, to save tax here?

Divakar agarwal (Student) (247 Points)
Replied 14 December 2017

Its better to register the flat in the name of husband only to avail the benefit of interest paid u/s 24 of the income tax Act, 1961.

Prajjwal Kaushik (Finance Professional) (6216 Points)
Replied 14 December 2017

Z ( ) (2960 Points)
Replied 15 December 2017

It is possible to claim the deduction. The deduction will be available to the real owner of the property and that can be proved from the records of payment. You will have to show that the payment is made from your bank account and that you are the real owner of the property and hence all the deduction be allowed to you, being the true and real owner of the property.

It would be much much better if co-ownership is possible.

Same also applies in case of capital gain. I have been adamant on my this view since years and in my parents' case also I did the same. I received the notice and gave all the explanations and the exemption was allowed.

[Well, It is important that AO is also a like-minded individual.]

Your call.