Housing loan deductions under income tax act
Neeraj Gupta
(Querist) 13 October 2013
This query is : Resolved
I am going to purchase a house property worth Rs 45 lacs and taking a
bank loan of Rs 30 lacs for it. I am a salaried employee and does not
own any house property in my own name. Although I have a flat
(purchased in 2008 under Power of Attorney in name of my mother). With
a pure intention to save stamp duty (of around 2% on cost of purchase)
and also to avail income tax deductions, I wish to use the following
route to acquire the above mentioned house.
Route
I will buy the house in name of my mother (registry in her name). Bank
loan will be in her name with my name as co-applicant (as she will not
be eligible for 30 lac bank loan due to her low monthly income).
Although she will use her own funds for balance portion (15 lacs, 45
minus 30).
On the date of registry, my mother will sell the house to me at same
price (or with some mark-up) through a sale agreement (this will not
be registered) and/or power of attorney in my name. Sale agreement
will also comprise that I will take over bank loan from her. Now EMIs
will be paid from my account only. Thus it will make me owner of the
house as per section 24, 27, 269UA of the Income Tax Act 1961 and i
will be eligible for income tax deduction of housing loan interest and
principal.
Instead of going for sale agreement with my mother (as stated in above
para), my mother can make a will in my favour in regard to above
mentioned house which may or may not be registered. This will make me
owner of the house as per section 24, 27, 269UA of the Income Tax Act
1961 and i will be eligible for income tax deduction of housing loan
interest and principal.
Please give your suggestion on my understandings or suggest any other option.
Isaac Gabriel
(Expert) 13 October 2013
Will can take effect after the demise of the executor.If the bank agees to advance loan based on the sale agreement you can enter into such arrangement.
Rajendra K Goyal
(Expert) 21 October 2013
Better pay the Stamp duty at present in spite of going in such complicated process. The Bank has given loan and it will not allow legally to take over of the loan without its full payment by the original owner.
Anirudh
(Expert) 21 October 2013
Dear Mr. Neeraj,
Better watch your moves. LENE KE DENA NA PAD JAYE!
You say that you have a Flat purchased in 2008 under power of Attorney in favour of your mother.
Before anything further can be said in response to your query, please the following:
(1) Whether the Flat has been mutated in favour of your mother in the records or not.
(2) Whether you got the sale deed of the Flat registered with the Sub-Registrar's office in favour of your mother, by paying Stamp Duty or not.
Only after knowing the answer to point (1) and (2) above, anything further can be said.
Neeraj Gupta
(Querist) 21 October 2013
(1) not yet as this flat is under construction yet (being constructed by state housing board)
(2) same as above
Anirudh
(Expert) 21 October 2013
Dear Neeraj,
You have not understood my query.
You said that you have purchased a flat in 2008 under GPA. Do you mean to say that Flat is still under construction?
Rajendra K Goyal
(Expert) 23 October 2013
Go through the tax deduction sections of Housing loan, I agree your steps may lend you to LENE KE DENA NA PAD JAYE!.
Discuss fully with tax consultant.
Neeraj Gupta
(Querist) 23 October 2013
Dear Mr Anirudh,
I have replied about your query on flat purchased in 2008 only. Yes the said flat is still under construction.
R.V.RAO
(Expert) 21 February 2014
sec 24 of IT act deals with permissible deductions and conditions for deductions from income from house property.
SEC 24 or 27 or SEC 269UA do not confer any right on you to become owner of property without registration(where u need to pay regn. and stamp duty)or will or gift /transfer /relinquishment in your favor by your mother.
in any case to make her as owner she needs property regn. in her favor.
sale agreement does not bestow transfer of ownership of property under TP Act.
did you discuss with bank as to what security you offer them for the home loan?
IT EXEMPTION AVAILABLE FOR YOU ON STAMP DUTY AND REGN. COST PAYABLE AT TIME OF HOUSE REGN. WILL SET OFF TO SOME EXTENT THE REGN.COST PAID BY YOU.
