Dear Gautam,
                           Both the loan and house property should be in the name of assessee, if the house property is in name of his family members & the loan is in name of assessee, deduction cannot be claimed by assessee even if EMI is paid by assessee.
 

The principal component of the housing loan EMI, which is eligible for deduction under section 80C, is subject to following condition :  

If the house is in the name of your family member (spouse or your parents) and you make the repayment of loan yourself, the deduction u/s 80C won’t be allowed.

Better claim house rent.

Pay rent to your mother and then pay EMI from your mother's account. 

DEAR NINAD AND SURENDRA SIR,

I HAVE A DOUBT.. PLS CLAIFY...

U/S 80C, NO WHERE MENTIONED THAT THE PROPERTY MUST BE IN THE NAME OF PERSON PAYING INSTALLMENT. IT SPECIFIES THAT ANY PAYMENT MADE TOWARDS THE COST OF PURCHASE/ CONSTRUCTION OF RESIDENTIAL PROPERTY INCL. REPAYMENT OF HOUSING LOAN WOULD BE ALLOWED AS DED U/S 80C. AND NOTHING PROVIDE ABOUT THE OWNER OF THE PROPERTY.

FURTHER, IF SCRUTIINY COMES, AO MAY ASK FOR CERTIFICATE FROM BANK SPECIFYING THE AMOUNT PAID TOWARDS PRINCIPAL AND INTEREST SEPERATELY. BANK LOAN IS IN THE JOINT NAME OF BOTH, BUT ACTUAL PAYMENT MADE BY THE GAUTAM FROM HIS BANK ACCOUNT. IN ORDER TO FURTHER SUBSTANTIATE, AO MAY ALSO ASK FOR THE BANK STATEMENT OF GAUTAM TO SCRUTINIZE WHETHER ACTUAL PAYMENT MADE THROUGH HIS BANK ACCOUNT OR NOT. AO MAY NOT ASK FOR THE OWNERSHIP STATUS OF THE PROPERTY SINCE UNDER SEC 80C PAYMENT IS IMPORTANT AND OWNERSHIP CRITERIA IS NOT MENTIONED.

REGARDING INTEREST, I FULLY AGREE WITH NINAD THAT GAUTAM WOULD NOT GET THE DEDUCTION UNDER SEC 24(b) SINCE HE DOESN'T OWNED THE PROPERTY EVEN THOUGH ACTUAL PAYNMENT MADE BY HIM.

REGARDS,

MANOJ

Originally posted by : CA SURENDRA KUMAR RAKHECHA
	Better claim house rent.   Pay rent to your mother and then pay EMI from your mother's account.

but sir rent received will be taxable from income from house property no sir, instead why cant the mother execute a gift deed or write a will to gautam for transferring the property.. by which they can claim interest and principal deduction as well as they can avoid capital gain no sir.