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Repay home loan from spouse income

tsgd84 (SE) (27 Points)

07 December 2016

Experts,

I have taken a home loan before my marriage. I am single owner of the property and loan is on my name only.

After marriage, I utilize my wife's salary to repay the loan however I haven't added her as joint application or co-applicant. Say, every month when she gets the salary, she diverts a sizeable money to my home loan account.

What are the complications or tax implication on this?

Thanks,

Deena

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9 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 07 December 2016

As she is not (Co-) owner of the property and not co-borrower of the loan, so she cannot claim interest deduction u/s. 24b. Treat the amount as gift/loan from your wife, and you continue to get the deduction under your ITR.

CA Rizwan Saifi (Founder @ CharteredHelp) (117 Points)
Replied 07 December 2016

Since your wife is not co-owner therefore deduction of Interest payment is not available to her.

the best is just treat the amount as gift from spouse accordingly it will not chargeable to tax in your hand.

tsgd84 (SE) (27 Points)
Replied 07 December 2016

Under which section the money has to be treated as gift?

I am already taxed at 20%

Will it be a problem?

CA Rizwan Saifi (Founder @ CharteredHelp) (117 Points)
Replied 07 December 2016

Gift u/s 56(1)(v) is exempt if received from relative (spouse is also comes under the defination of relative)

tsgd84 (SE) (27 Points)
Replied 08 December 2016

Doesn't Gift u/s 56(2)(vii) says there is a limit of 50000 can only be taken as gift?

In my case I receive more than 50,000. How does it impact the declaration or liability from my side?

CA Ashish Barthwal (Practising Chartered Accountant) (104 Points)
Replied 08 December 2016

Monetary limit is for the person other than relatives

CA VIRAL SANGHVI (Finance head) (681 Points)
Replied 08 December 2016

The gift received for more than 50,000 is taxable under the head income from other sources, but in your case the gift is received from your wife and wife is covered under the definition of relative so it is not taxable.section 56 (2)(vii) under the Income tax Act,1961.