treatment of interest on housing loan for joint owners

This query is : Resolved

V.S.Rajagopalan

V.S.Rajagopalan (Querist)
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03 January 2013 A couple jointly purchased a flat by availing home loan from a Bank.It is occupied by them. EMIs were paid from their joint account.The Principal and Interest comes to 80000 and 310000 respy. Are they entitled for exemption under sec 80C and sec 24 at Rs. 40000 and 150000 individuality . Please provide case law.

Anand

Anand (Expert)
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04 January 2013 Since the flat has been jointly purchased, the same will have to be considered in the hands of each of the holders for the purpose of Income from House Property.

Both can & must claim deduction for Principal and Interest equally in their returns since they are co-owners of the property.

I am not aware of any case-law, but i am of the view that the provisions of Section 26 which deal with Property owned by Co-Owners is clear on this subject. For your benefit i will summarise:
If property is owned by 2 or more persons & their share is definite & ascertainable, then share of each person is to be included in his total income. the method of computation will be as per Sections 22 - 25 which deal with deduction for interest and valuation of property.
Regarding principle repaymennt also section 80C states that the deduction is allowable for sum paid by the assessee. since the payment is routed through a joint account and loan is in joint name, it is appparent that both husband and wife are making the payment. In such circumstance, the deduction u/s 80C for principle is also allowable