I Work in an IT Company and took a housing loan from HDFC Bank. I am the co-applicant. The property is in my mother’s name but she is a housewife and i pay all EMIs. Am I eligible for tax benefit ?
A Deduction under section 80C of the act toward the payment made by way of repayment of amount borrowed by the assessee from the bank for the construction or the acquisition of a residential house is allowed to a person who is the owner of the residential house. in your case, the owner of the house being your mother, you would not be entitled to any deduction under the said section.
Q. I took a loan in my wife’s name for buying a house in her name. I am a salaried employee and I have been repaying the EMIs on the said loan out of my income. Can I claim the deduction under Sections 80-C and 24 in respect of the principal repayment and the interest on the housing loan?
A. The deduction under Section 80-C in respect of the principal repayment and under Section 24 in respect of the interest on the housing loan can be claimed by the owner of the property.
The question therefore will be whether you are the owner of the house property for the purpose of the claim under these sections.
You may note that the ownership in this context does not refer to the registered ownership but to the real ownership.
In your case if you are able to show on the facts that you are the real owner of the property, the deductions will be available to you though your wife is the registered owner of the property.
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- Tax Implications on Second House Property
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{ 4 comments… read them below or add one }
Dear Sir
I am Balaji Jagannathan and I have a query regarding the IT exemption on interest paid for Home Loan. My wife and self purchased a flat and the flat has been registered in both of our name. I am the main applicant and my wife is the co applicant for the home loan purpose. We are paying close to Rs 3.20 Lacs towards the interest component on a yearly basis. Both of us are employed (Salaried)
Question is
Can we claim IT deduction of Rs 1.6 Lacs each (1.6 + 1.6 = 3.2 Lacs Interest paid) on the interest component paid towards the home loan.
This will help us to save taxes.
hi
I am in a similar situation but I couldn’t quite follow the following in your answer
“You may note that the ownership in this context does not refer to the registered ownership but to the real ownership.
In your case if you are able to show on the facts that you are the real owner of the property, the deductions will be available to you though your wife is the registered owner of the property.”
How do we show the real ownership? Do you mean the fact that loan was taken and EMIs are paid by oneself would be sufficient? Or a letter from banker to indicate that the payment is made by you would be required?
sir pls guide me which documents show me the real owner of the property,
thanks
I have purchased a flat in my wife’s & Self name. My wife is first applicant & I am the co-applicant as per the Sale Agreement. We have taken the housing loan agst. the said flat. My question is :- Can we Claim It deduction u/s 80-C & u/s 24 ( principal amt & Interest on Hsg. Loan amt) ie 50% share by me & 50% by my wife. Please advise.