25 April 2008
Sec 24(b):In case of co-owners, each co-owner is eligible to claim a dedcution of interest on housing loan to the extent of Rs. 150,000/- in case of self occupied property.
Do share any supporting case law for the above.
Also, do clarify whether restriction of interest to Rs. 150,000/- is inclusive of pre-construction interest also.
25 April 2008
YES. EXPLANATION UNDER SEC 24 (b)REFERS TO PRE-CONSTRCT. INT. EACH COOWNER CAN CLAIM INT.ON HOUSING LOAN OF UPTO RS 150000/-PROVIDED THEIR SHARES ARE PREDETERMINED IN THE SALE AGREEMENT AND THEY SHARE THE EMI THROUGH BANK DEBITS EITHER IN THEIR JOINT OR SEPARATE BANK A/C. AS IT APPEARS FROM expl. UNDER SEC 24(b),I FEEL EVEN PRE- CONSTRC. INT. CAN ALSO BE CLAIMED BY BOTH. WHAT ALLOWS UNDER THE ONE PART OF THE SECTION ALSO APPLIES TO THE OTHER PART ALSO AS IT IS NOT SPECIFICALLY DENIED. OTHER MEMBERS PL. SHARE MY VIEWS . R.V.RAO
DEAR SHISHIR IAM QUOTING BELOW FROM WWW.TAXWORRY.COM ONE CAN CONFIDENTLY PROVE THE POINT WITH THIS.
Both the joint owners are eligible for claiming the deduction of interest u/s 24 as well as deduction u/s 80 C of the principal amount paid . In each case , limit of Rs 1,50,000 for interest and principal deduction upto Rs 1,00,000 applies. For example , you and wife both have taken the loan jointly and utilized for house, and suppose total of 1,00,000 of interest and Rs 1,00,000 was paid as principal to the home finance company, both of you can claim deduction u/s 24 of Rs 50,000 and deduction of principal of Rs 50,000 each u/s 80C.
How to get the certificate for that? Simple, ask the financing Bank to issue certificate in joint name i.e both your name and your name should be indicated in the certificate to show that payment has been done by both of you. It will not be problem because the finance companies are very much aware of it and may be issuing many certificates that way on regular basis.
Yes for joint owners of the property ,there is explicit provision in in Section 26 of the I T Act . Read the excerpt of the section below:
26. Where property consisting of buildings or buildings and lands appurtenant thereto is owned by two or more persons and their respective shares are definite and ascertainable, such persons shall not in respect of such property be assessed as an association of persons, but the share of each such person in the income from the property as computed in accordance with sections 22 to 25 shall be included in his total income. Explanation.For the purposes of this section, in applying the provisions of sub-section (2) of section 23 for computing the share of each such person as is referred to in this section, such share shall be computed, as if each such person is individually entitled to the relief provided in that sub-section. SOURCE:www.taxworry.com R.V.RAO
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