INTEREST ON HOUSING LOAN - QUERY

Tax queries 1747 views 15 replies

Vijha

Article assistant

38 Points Joined October 2009

A client has received a notice from the Income Tax dept regarding Interest on Housing Loan claimed by him in the A.Y.2006-07. The facts are as follows;

Mr.S & Mrs. S jointly hold a House property in Chennai which is self occupied by both. Mrs.S, whose income is more than Mr.S's income is a co owner to the property. She is also the co borrower to a Housing Loan . Interest for that year of Rs. 76,229/- was paid fully by Mr.S from his A/c.

Can Mr.S claim the entire amount u/s 24 or should it compulsarily be claimed by both? If it is to be claimed by both, then in what proportion?

Is there any case law in support of the same?

Kindly advice me on the same.

Replies (15)

Neelesh Bajaj

Practising CA

30 Points Joined November 2009

Originally posted by :Vijha

A client has received a notice from the Income Tax dept regarding Interest on Housing Loan claimed by him in the A.Y.2006-07. The facts are as follows;
Mr.S & Mrs. S jointly hold a House property in Chennai which is self occupied by both. Mrs.S, whose income is more than Mr.S's income is a co owner to the property. She is also the co borrower to a Housing Loan . Interest for that year of Rs. 76,229/- was paid fully by Mr.S from his A/c.
Can Mr.S claim the entire amount u/s 24 or should it compulsarily be claimed by both? If it is to be claimed by both, then in what proportion?
Is there any case law in support of the same?
Kindly advice me o

You have not mentioned what tax planning you have done and what is the AO's notice mentions. this will give more clarity to the query

Vijha

Article assistant

38 Points Joined October 2009

Mr.S has received a notice that he cannot claim the entire interest amount u/s 24 as his wife is also a owner. Is that right?

I would like to know if , the property being jointly held and loan also taken jointly, is it ok for Mr. S to claim the full amount as he has paid the amount from his a/c.?

Aditya Maheshwari

CA in Practice

35867 Points Joined June 2009

If they both are coowner of the property and co borrower of the property then interest should be claimed in the proportion of loan taken

Vijha

Article assistant

38 Points Joined October 2009

If Mrs. S gives a disclaimer letter that she does not want to claim the deduction u/s 24, can Mr. S claim the entire amount?

Also since Mr. S has paid the entire amount , is it not more logical that Mr.S claims the entire amount?

CA Devanshi Gandhi (Ajani)

FCA DISA Mcom CIFRS & LLB

9060 Points Joined February 2009

interest should be claimed in the proportion of share in the house property

CA Pooja

114 Points Joined September 2009

If Mr S is 50% owner of the house then he can claim interest deduction upto that proportion only

Tarun

CA Final Student

89 Points Joined January 2009

i think only proportionate deduction would be available to Mr. S

He cannot claim full ded of interest u/s 24 as he is paying Mrs. S' interest ( on Mrs. S' loan ) ...

Ded is available only on the interest paid on amt borrowed by him ...

But i am not 100% sure ..

CA. SUDHARSAN K G

Chartered Accountant

472 Points Joined August 2007

Hello,

Two alternatives are available,

a) Entire amount can be claimed by either by Mr or Mrs.

b) Proportionate amount for their respective shares in the property

The logic behind the logic is the amount claimed should not exceed the amount paid. With the above alternatives it is satisfied.

Vijha

Article assistant

38 Points Joined October 2009

Mr Sudarsan , Could you site some case law , if any..?

Harshit Malviya

CA final student

79 Points Joined July 2008

Originally posted by :Vijha

depricition is separately allowable to each co owner.

refer case law >>>CIT v Abdullabhai M. Moonim[1981]132 ITR6 42 (Bom)

Deepak

Student

127 Points Joined January 2009

Vijha Mam!

I want to make u very crystal clear tht the Interest on housing loan is allowed as deduction on ACCRUAL BASIS, as u know.

Hence it is immaterial tht who has paid it, so, deduction would be allowed on proportionate basis of their holding.

AO is correct by denying tht ded only to mr x who has paid the whole interest.

ca tarun sharma

SERVICE

277 Points Joined July 2008

if house property is owned by co owner then it will be treated as self occupied in hand of both co owner & if co owner also owned any other house property (self occupied ) then co owned property will be deemed to be let out (at option) in hand of all co owner in proportion of their share in property & rental income also be taxed in their hand in that proportion. so in first case (self occupied ) int deduction U/s 24 shall be allowed to all co owner subject to max limit of 150000 for each & in case of DLO Property actual amt of int without limit proportionately