21 December 2010
A and B jointly procure a loan for construction of house property.A repays the loan entirely and wishes to claim the entire interest as deduction since B is an NR for that year. Can A claim it? If in future B(becomes Resident) wishes to claim the int entirely, can he do so with regard that initially deduction was being claimed by A only? Can the percentage mutually eg(60:40)agreed between them be altered in future?
21 December 2010
In accordance to Section 26 , in case of co-owners, where their share is definite and ascertainable, share of each person in the income from property as computed in accordance with section 22 to 25 shall be included in his total income.
U/s 24, Interest is allowed on accrual basis, not on payment basis, and in case of co-borrowers, it is the liability of each co-borrower in respect to principal as well as interest. Interest if paid only by one of them, then it will be treated as if he has paid on behalf of another person according to their own understanding. As such act does not provide such facility.
22 December 2010
A can claim that much deduction for which he is entitled. His entitlement is based on the certificate issued by the lender. The lender would issue Interest certificate in joint names. Hence A can not claim B's Interest.
25 December 2010
Sir if both enter into a mutual agreement between themselves that MrA would be taking the entire deduction of the loan interest. Can it be done? Is there a way out?
CAclubindia
