Deduction U/s 24 I.T. Act
SANJAY DIXIT
(Querist) 18 July 2008
This query is : Resolved
My friend has taken a loan jointly with his wife to buy a house property. Basically the loan is sanctioned on my friend's salary and repaying capacity only. EMI is Rs. 17,000/- Whereas my friend's wife salary is Rs.14,800/- only.
My friend has registered the house property in his wife's name only.
In this circumstance whether my friend can claim Interest on salary u/s 24 and deduction u/s 80C for the principal portion paid from his salary income.
Please suggest.
Guest
(Expert) 18 July 2008
As long as the outgoing if proveable from the bank payments and other documentary evidence, it should be possible to take the benefit. However, both cannot claim the very saem benefit. If one claims interest the other party can claim the principal repayment under 80C. Or else Husband can claim everything.
Is the wife filing separate returns. If so they can have MOU wherein a clear understanding is written, distributing the responsibilities.
SANJAY DIXIT
(Querist) 18 July 2008
Dear Kotresh,
Thanks for the quick reply.
Yes, the wife is filing the seperate returns as her annual income from salary itself is ~ Rs. 1,78,000.
Vineet
(Expert) 10 December 2009
Dear Mr Sanjay
As the property stands in the name of wife only, husband cannot claim any deduction u/s 24 even if he is making payment to bank. The logic is very simple, for getting any deduction under a particular head, you should have income chargeable under that head. As the husband does not have any income from house property (had the house been in his name, it would have been nil income as house is self occupied), he cannot claim deduction for any payment.
I completely disagree with reply of Mr Kotresh. It is not left to individual's free will to claim interest in one owner's hand and deduction u/s 80C in other hand. In the case of co-owners, each rebate, deduction etc shall be available in the proportion of specific share of owners in the property.
In the instant case, the property stands in the name of wife only, hence husband cannot claim any deduction or rebate for any payment against it.
However, you can explore clubbing of loss arising to wife from this property as the same is being purchased with gift from husband.
