LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Loss of income - let out property

Kumar (mm) (45 Points)

13 June 2011

Dear sir,

I have a let out property. This property is my name & my wife’s name. There is no division of share mentioned in sale deed with builder. We have housing loan for the property and that too in joint name. But I pay the EMI from my salary. My wife is housewife and doesn’t have any taxable income. There was no contribution from her side towards purchase cost of flat. Her name was included in sales deed only from a security angle. I wish to include half of the rental income in my income and other half in my wife’s income. Since I pay the EMI fully form my salary, shall I deduct the housing loan interest fully from my income (rather than reducing half of the housing loan interest). Could you please clarify.

Regards

Kumar

Reply
Follow
Share

17 Replies

CA Mukesh Jain S (Chartered Accountant in Practice) (692 Points)
Replied 13 June 2011

You both are Co- Owners. Income from HP is taxable on the basis of ownership. Half of the rent is taxable to each of you, similarly, interest also needs to be shared proportionately.

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 13 June 2011

Originally posted by : CA Mukesh Jain S
	You both are Co- Owners. Income from HP is taxable on the basis of ownership. Half of the rent is taxable to each of you, similarly, interest also needs to be shared proportionately.

yes agreed

VIJAYKUMAR (CHARTERED ACCOUNTANT) (203 Points)
Replied 13 June 2011

Yes agreed

Kumar (mm) (45 Points)
Replied 13 June 2011

thanks you, i understand. here in my case wife have not made any contribution for the purchase of property. also her share of property not mentioned in sales doc. i pay emi also. she doesnt have taxable income. still i can claim only half of the housing loan interest as deduction? is there a way she can make me full owner of property. we are at a loss due to this complication. please suggest.

thanks & regards

Kumar

Rajnikant Vadigoppula (CA, CS And CMA Final) (919 Points)
Replied 13 June 2011

If her name is not mentioned in sales deed then u can claim the whole interest expenses.

(Guest)

Dear friend,

Let me explain. In income tax there is one simple rule the person who has invested in the property is the owner even if the whole of the property is in the name of wife. You will be treated as deemed owner u/s 27.

So forget about co-owner u/s 26.

Whole of the rent wil be taxable in your hands. There is no way u can get away from this.

As far interest is concerned u should claim its full deduction. If u have not claimed in earlier PY then claim it by filing revised return u/s 139(5).

If time limit of RR has expired go for S 154 rectification of mistake.

I hope it is ok.

2 Like

amit jain (Chartered Accountant) (532 Points)
Replied 14 June 2011

since whole of emi is form your account and your wife has no taxable income you are deemed woner and can claim whole of interest.....

Deepesh Khatri (CA) (167 Points)
Replied 14 June 2011

Income from House Property u/s 22 and 23 is calculated on property to property basis.

While deductions u/s 24 are allowed to an assessee and not to a property.

Hence each co-owner/joint owner can claim deductions u/s 24 separately.

Kumar (mm) (45 Points)
Replied 14 June 2011

thanks for replying to my query. am bit confused. can i claim the full housing loan interest deduction from my income. i am ok to add the full rental income as my income. pls suggest. regards

regards

Kumar

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 15 June 2011

Mr Kumar, you and your wife both are co-owner of the property. According to the IT act, income derived from the property shall be devided accordingly your share in the property.. and interest payment will be devided equally ( if share is equaly )...

CA,CMA,CS Karan Gogia (Employed) (230 Points)
Replied 19 June 2011

agree with mr. kaushal......

CA Mukesh Jain S (Chartered Accountant in Practice) (692 Points)
Replied 22 June 2011

I feel Kaushal is right.

Raman (Salaried) (78 Points)
Replied 19 December 2011

In this case if owner is salaried employee can he also claim deduction u/s 80c for principal repaid. Say for e.g rental income 15k pm , interest paid during the year 3,00,00 and principal repaid during the year 50k. Can owner say that loss on house property = 1,80,000-3,00,000 = -1,20,000 and for 50K repaid can he include that with his other investments and claim deduction u/s 80c.

Pls clarify.

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 19 December 2011

Originally posted by : CS K.K. Agrawal (taxbykk)
	Dear friend, Let me explain. In income tax there is one simple rule the person who has invested in the property is the owner even if the whole of the property is in the name of wife. You will be treated as deemed owner u/s 27. So forget about co-owner u/s 26. Whole of the rent wil be taxable in your hands. There is no way u can get away from this. As far interest is concerned u should claim its full deduction. If u have not claimed in earlier PY then claim it by filing revised return u/s 139(5). If time limit of RR has expired go for S 154 rectification of mistake. I hope it is ok.