Query on Paying Rental while being part owner of the House

Tax queries 794 views 4 replies

Nitin

ASM

30 Points Joined December 2008

Hi Dear Friends!

I have a questions which if answered, will help us take a decision on buying our house. Hope you will answer it soon. Thanks.

1. If Father, Mother & Son buy a House Jointly (also availing Home Loan) having equal shares & all are earning tax payers; Father & Mother don't stay there & Only Son stays there . Can:

a) Son pay rent equal to 2/3 of the actual rent prevailing in that area to the other two owners for using the property fully?

b) Father & Mother both Claim Tax Rebate on Interest of Home Loan individually?

b) Son Claim Tax Rebate & HRA Exemption both on the same property being only part owner & part tenant?

e) What if instead of Son, his Wife (also an earning member) buys jointly with parents & Not Son? Will she also get the same benefits?

f) What if both Son & his Wife both jointly buy along with parents?

Capt Nitin Soni

Replies (4)

Vijay Patil

Practising Chartered Accountant

46 Points Joined November 2010

as per the provisions of Section 26, if property is owned by two or more than two person and their share is definite & ascertainable then the share of each such person in the income from the property as computed in accordance with sections 22 to 25 shall be included in his total income

mother & father can claim interest deduction in their share of income

son can claim HRA deduction and interest deduction both and no change if son's wife enter into the transaction.

jist is simple, in case of co-owner every owner will be assessed seperately and dedcutions will be given accordingly.

sachin kakkar

188 Points Joined February 2010

how can both HRA and ded. of int b takn togthr?????? i thnk its wrong... plz correct me if i m wrong??????

Vijay Patil

Practising Chartered Accountant

46 Points Joined November 2010

yes it's possible because both the sections are independent for deduction interest deduction is claimed u/s 24 while HRA deduction is claimed u/s 10(13A). because it's a peculier transaction that son is using whole house and some portion is not owned by him and hence is paying rent and can be claimed.