Amit Gautam (Lead) 14 January 2014

Tax benefit on home loan

Dear all,

I have bought a house recently and availed the Home Loan to buy it. However, I have registered (conveyance deed) the house in name of my mother. She is home-maker and does not have any source of income. She is the sole owner of the house. She is also the co-applicant in the Home Loan (sharing 0% of loan re-payments). We got the possession of the house in Oct-2013 and started living in it.

I want to avail the tax benefit for the interest and the principle I am paying for this property. I learnt that to avail the tax benefit, one must be the owner (or co-owner) of the property. In my case I am neither owner nor co-owner.

Is there any way I can avail tax benefit in this scenario? Please help me as I have hefty loan and now I am seeing the trouble where I am paying the both EMI without any Income-Tax benefit.

Regards.

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2 Replies

Margesh D. Gandhi (Tax Consultant) 15 January 2014

Yes. It is correct that for taking tax benefit of housing loan .ones should have co owner or owner of the house and loan should be in the name of owner. So for taking benefit you can transfer house and loan in your name.

Advocate Kappil Cchandna (Expert Bail & Criminal Defence Lawyer at Delhi Supreme Court of India) 19 January 2014

Dear,

In order to claim interest exemption of above 1.5lacs by you , the property must be let out. Under section 80c of Income Tax Act, 1961 exemption of Rs.1,00,000/- is available against principal amount paid towards loan amount.

It is always beneficial to declare the property as let-out and show minimum rent to avail the benefit of above 1.5lacs against interest.

CA Karan Chandna

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