Queries on deductions under interest on home loan and HRA

POSTED BY Lubhit Singhvi ON January 26, 2013 4:44 pm COMMENTS (2)

2 replies on this article “Queries on deductions under interest on home loan and HRA”

  1. Dear Lubhit, I;m trying to answer your queries.

    Queries on deductions under interest on home loan and HRA
    1. Scenario A: Title of the property is solely with wife (Person A) who is a non earning member. The home loan is taken by husband (Person B) who is paying bank EMI. Can person B while filling income tax take benefit of 1.5L as interest on home loan though he is not an owner of the property?
    No, to claim income tax benefit on interest of home loan, ownership of the property is a pre condition.
    Is it mandatory to own the title of property 100% or share for a person to claim interest on home loan as deduction? The %age share of ownership ‘ll be the same %age for interest benefit.

    2. Scenario B: In the event a resale flat is purchased jointly by Person A & B (Wife & Husband) at a specific ration of fund contribution, where Person A is non earning member in family. Will the rental income received for the purchased property get proportionally added to both individual’s income for taxation? In there any provision to adjust the entire rental income towards person A’s income for tax planning (non earning member in family).
    The income ‘ll be added into both’s income as per respective ownership share in the property. You may receive the rental cheques in a single name for ease of operation but from taxation point of view, income ‘ll be split as stated above.

    3. Scenario C: Title of the property is solely with Person A who is a non earning member. The purchased property is in different city viz. the city of residence of Person A. The home loan for purchased property is taken by Person C (Son of person A). The person C pays the EMI for home loan and Bank provided a certificate at the end of the financial year for the interest paid. Person C stays in the purchased flat and gives RENT to Person A (mother). Can person C claim HRA for the rented accommodation? Since the title of the property is with Person A only can person C claim deduction for interest on home loan? Can Person C claim both HRA and deduction for interest on home loan ?
    In this case, person C can claim only HRA benefit not the interest one as the ownership of the property is not with him (Son). Rest already discussed above.

    Thanks

    Ashal

  2. Lubhit Singhvi says:

    Queries on deductions under interest on home loan and HRA

    1. Scenario A: Title of the property is solely with wife (Person A) who is a non earning member. The home loan is taken by husband (Person B) who is paying bank EMI. Can person B while filling income tax take benefit of 1.5L as interest on home loan though he is not an owner of the property?
    Is it mandatory to own the title of property 100% or share for a person to claim interest on home loan as deduction?
    2. Scenario B: In the event a resale flat is purchased jointly by Person A & B (Wife & Husband) at a specific ration of fund contribution, where Person A is non earning member in family. Will the rental income received for the purchased property get proportionally added to both individual’s income for taxation? In there any provision to adjust the entire rental income towards person A’s income for tax planning (non earning member in family).
    3. Scenario C: Title of the property is solely with Person A who is a non earning member. The purchased property is in different city viz. the city of residence of Person A. The home loan for purchased property is taken by Person C (Son of person A). The person C pays the EMI for home loan and Bank provided a certificate at the end of the financial year for the interest paid. Person C stays in the purchased flat and gives RENT to Person A (mother). Can person C claim HRA for the rented accommodation? Since the title of the property is with Person A only can person C claim deduction for interest on home loan? Can Person C claim both HRA and deduction for interest on home loan ?

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