Income Tax Treatment of the Joint Housing loan

POSTED BY Nilesh Patel ON October 12, 2013 10:29 pm COMMENTS (4)

Dear Ashal sir,

I have one query about the Income Tax Treatment of the Joint Hosing loan for the case where Husband (H) is the sole owner of the house and Wife (W) is Co-borrower (not co-owner) in the loan (Wife is added to loan to increase the loan eligibility only)

1. Here If Husbund(H) is paying full EMI, Will Husband be eligible for the full deduction u/s 80 C for the total repayment made by him, will Husband be eligible for the full deduction u/s 24 for the total interest payment made by him ? as he is the sole owner and sole repayer of the EMI (Principal + Interest)

2. Will there be any amount not eligible for tax deduction for the payment made by the husband?

I try to get resolve my query of situation where wife is added only for the increasing loan eligibility, wife is not the co-owner as well as not paying a single rupee for the loan+Interest repayment.

Pl. help what would be the tax deduction treatment.

Is any agreement of the repayment liability with the wife has to be made for claiming total payment as tax deduction in the hands of husband.

pl. provide the course of action for full tax deduction as Husband (H) want to add wife(W) as co-borrower in the loan for enhancing loan eligibility only. (She will not be co-owner). Wife(W) will not pay a single rupee for the Loan & Interest payment. (H) will pay full EMI.

Will (H) be eleigible for the tax benefit as if (H) is the single owner and single borrower?

May pl. reply.

4 replies on this article “Income Tax Treatment of the Joint Housing loan”

  1. ashalanshu says:

    Dear Nilesh, yes the way you gave calculation husband can get full 1.8L Rs. benefit. As wife in question is not co-owner, there is no need to enter in any agreement with her. Make sure all the EMIs are paid by husband only.

    Thanks

    Ashal

    1. Nilesh Patel says:

      Thank you very much.

  2. ashalanshu says:

    Dear Nilesh, as the husband is absolute owner and wife is merely co-borrower, she can not avail any tax benefit. In case of husband, full section 80c benefit for loan repayment is available withion the over all limit of 1L Rs. For interest, if the property in question is self occupied, the limit ‘ll be 1.5L Rs. but in case the property in question ‘ll be on rent, the rental income from the house ‘l be added into the income of husband but full interest without the ceiling limit of 1.5L Rs. is available for tax benefit here.

    Thanks

    Ashal

    1. Nilesh Patel says:

      Thank you very much for prompt reply sir.

      So, what I understand and want to clarify myself in the above case is that if the total EMI payment for the 12 months is Rs. 1,80,000/- (15000/- EMI * 12 Months) having break-up of Principal repayment 40000/- & Interest payment 140000/- (40000 + 140000 = 180000) paid by Husband only then

      Husband is eligible for deduction u/s 80 c for Rs. 40000/- with overall limit of Rs. 1 Lac and he is also eligible for Rs. 140000 /- for interest payment u/s 24 B with limit of Rs. 1.50 Lac.

      So, Husband will get full deduction of Rs. 1.80 Lac in the above case.

      Is it?

      May pl. confirm whether I am right or wrong.
      Please.

      If I am right then,
      Is any agreement or Document is required to be entered (maintained) by Husband with his wife for availing the above (full) deduction, if yes then may pl. also list / explain the same.

      With Warm Regards,

      Nilesh Patel

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