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Problem on 24(b)

Adityakumarhv (CA Final) (45 Points)

24 July 2011

Hi,

If someone has borrowed35 Lacs for acquiring a house property jointly with his wife and repayments are to be made through joint account, please let me know if both the individual and the wife will be eligible for a max deduction of150,000 each or75,000 each for the interest part (if share is defined as 50:50) as I get almost equally divided opinions on this subject

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21 Replies

Sunshine (Helping All) (10575 Points)
Replied 24 July 2011

i guess they are co owners of the house. as per sec 26, there share of income as well as deduction will be divided among them in the specified ratio which is 50:50 in this case.

So the deduction will be 75000 each at max.

Adityakumarhv (CA Final) (45 Points)
Replied 24 July 2011

please mention if there is any case law for the same.

Sunshine (Helping All) (10575 Points)
Replied 24 July 2011

u calculate the HP income ...give the deduction and bifurcate it afterfards among the 2..i would revert in case i get a case law fr the same

Deepesh Khatri (CA) (167 Points)
Replied 25 July 2011

[ Deductions from income from house property.

24. Income chargeable under the head “Income from house property” shall be computed after making the following deductions, namely:—

(a) a sum equal to thirty per cent of the annual value;

(b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital

As can be read, the section allows deduction to an assessee. Hence both Husband and Wife will be

allowed a deduction of Rs. 150000.

1 Like

CA Mukul Mittal (CA in practice) (384 Points)
Replied 25 July 2011

Income tax has not made any distinction in single ownership and co-ownership. in this section, the word used is assessee. Therefore, it can be interpreted that the deduction of Rs. 150000/- is allowed to both husband and wife..........

Vijay (Adamo Studio) (2112 Points)
Replied 25 July 2011

Int deduction cant exceed 1.5 lacs in any case for the same HP, if SO.

Snehal (Learning Tax) (129 Points)
Replied 25 July 2011

I think both are eligible for exemption upto Rs. 1,50,000/- respectively u/s 24(b).

And the said deduction can exceed Rs. 1,50,000/-., with no upper limit (Though limited to the amount paid as Interest), If the said HP is rented.

Just Divide equally the Total Interest amount paid in the applicable F.Y as per Bank Certificate, and follow the above provision.

CA Abhiram Bharat. (Assistant Manager Taxation) (508 Points)
Replied 25 July 2011

both will claim 1.5 lakhs each..

nimish solanki (IPCC CLEARED) (108 Points)
Replied 25 July 2011

BOTH ARE ELIGIBLE TO CLAIM 150000

CA. Roopali Kadam (Jobs on assignment basis.) (1453 Points)
Replied 25 July 2011

Both are eligible. It is per assessee not per hp

Naresh Patel (C.A. Final) (144 Points)
Replied 25 July 2011

Section 26 of the I T Act,1961 says that what income would be charged as an income if there are co-ownership in the house, the same shall be applied also for deduction to be claimed U/s.24(b). Therefor Husbund & his spouse will get the benefit only of Rs.75,000/- each against their individual income, if share in the property is in equal proportion between 2 individuals.