House loan deduction
This query is : Resolved
21 January 2016
Hi.
Suppose we have property in husband name and bank has sactioned housing loan jointly in the name of husband and wife.
Then you will claim deduction for it?
Is it depends upon who is paying it?
Suppose we have property in husband name and bank has sactioned housing loan jointly in the name of husband and wife.
Then you will claim deduction for it?
Is it depends upon who is paying it?
21 January 2016
The husband will be eligible for claiming deduction. For joint benefits both husband and wife should be joint owners as well as joint borrowers.
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22 January 2016
Thnks for your reply....
Sir I have one more question suppose I took housing loan for construction and say construction is completed after 3 years then repayment made in those 3 years is eligible for deduction u/s 80c?
Sir I have one more question suppose I took housing loan for construction and say construction is completed after 3 years then repayment made in those 3 years is eligible for deduction u/s 80c?
28 July 2024
### House Loan Deductions When Loan is Jointly Held
#### **Eligibility for Deductions:**
1. **Interest on Home Loan (Section 24(b)):**
- **Eligibility:**
- If the property is owned by both husband and wife, and the loan is also taken jointly, both can claim a deduction of up to ₹2 lakh per annum on the interest paid on the home loan under Section 24(b) of the Income Tax Act.
- **Payment Responsibility:**
- The deduction is not contingent on who makes the payment but rather on the fact that the borrowers are responsible for the repayment. Hence, both husband and wife can claim their respective share of the interest deduction even if one of them is making the payment.
2. **Principal Repayment (Section 80C):**
- **Eligibility:**
- For principal repayment under Section 80C, the deduction of up to ₹1.5 lakh per annum is available to the co-borrowers (husband and wife) if the property is co-owned. The deduction is apportioned based on the respective share of the principal repayment by each borrower.
- **Payment Responsibility:**
- Similar to the interest deduction, it is not necessary for the principal repayment to be made by the borrower claiming the deduction. As long as the loan is jointly held and the property is co-owned, both can claim the deduction in proportion to their share.
### **Housing Loan for Construction:**
1. **Pre-Construction Period:**
- **Deduction on Interest:**
- For the pre-construction period, the interest paid during the period when the construction is ongoing can be claimed in five equal installments starting from the year in which the construction is completed and possession is taken.
- **Eligibility:**
- The pre-construction interest deduction is available for the period during which the construction is ongoing, and the total amount of interest paid during this period can be claimed in five equal parts in subsequent years.
2. **Repayment of Loan During Construction Period:**
- **Principal Repayment:**
- For the principal repayment, the deduction under Section 80C is only available in the year when the construction is completed and possession of the property is taken. The repayment made during the construction period does not qualify for a deduction under Section 80C.
- **Interest Deduction:**
- You can claim interest deductions under Section 24(b) for the year in which the construction is completed, but the pre-construction interest can only be claimed in installments as mentioned above.
### **Summary:**
- **Joint Loan and Property Ownership:**
- Both husband and wife can claim deductions for interest and principal repayment if the loan is jointly taken and the property is co-owned, irrespective of who makes the actual payments.
- **Construction Period Deductions:**
- For the pre-construction period, interest payments are claimed in five equal installments starting from the year of completion and possession.
- Principal repayment deductions under Section 80C are available only in the year when the construction is completed, not during the construction phase.
### **Recommendation:**
- **Documentation:**
- Ensure proper documentation of all loan repayments and construction details. This will help substantiate your claims for deductions.
- **Consult a Tax Professional:**
- For specific cases and to ensure compliance with the latest tax laws, consulting a tax professional or chartered accountant is advisable.
#### **Eligibility for Deductions:**
1. **Interest on Home Loan (Section 24(b)):**
- **Eligibility:**
- If the property is owned by both husband and wife, and the loan is also taken jointly, both can claim a deduction of up to ₹2 lakh per annum on the interest paid on the home loan under Section 24(b) of the Income Tax Act.
- **Payment Responsibility:**
- The deduction is not contingent on who makes the payment but rather on the fact that the borrowers are responsible for the repayment. Hence, both husband and wife can claim their respective share of the interest deduction even if one of them is making the payment.
2. **Principal Repayment (Section 80C):**
- **Eligibility:**
- For principal repayment under Section 80C, the deduction of up to ₹1.5 lakh per annum is available to the co-borrowers (husband and wife) if the property is co-owned. The deduction is apportioned based on the respective share of the principal repayment by each borrower.
- **Payment Responsibility:**
- Similar to the interest deduction, it is not necessary for the principal repayment to be made by the borrower claiming the deduction. As long as the loan is jointly held and the property is co-owned, both can claim the deduction in proportion to their share.
### **Housing Loan for Construction:**
1. **Pre-Construction Period:**
- **Deduction on Interest:**
- For the pre-construction period, the interest paid during the period when the construction is ongoing can be claimed in five equal installments starting from the year in which the construction is completed and possession is taken.
- **Eligibility:**
- The pre-construction interest deduction is available for the period during which the construction is ongoing, and the total amount of interest paid during this period can be claimed in five equal parts in subsequent years.
2. **Repayment of Loan During Construction Period:**
- **Principal Repayment:**
- For the principal repayment, the deduction under Section 80C is only available in the year when the construction is completed and possession of the property is taken. The repayment made during the construction period does not qualify for a deduction under Section 80C.
- **Interest Deduction:**
- You can claim interest deductions under Section 24(b) for the year in which the construction is completed, but the pre-construction interest can only be claimed in installments as mentioned above.
### **Summary:**
- **Joint Loan and Property Ownership:**
- Both husband and wife can claim deductions for interest and principal repayment if the loan is jointly taken and the property is co-owned, irrespective of who makes the actual payments.
- **Construction Period Deductions:**
- For the pre-construction period, interest payments are claimed in five equal installments starting from the year of completion and possession.
- Principal repayment deductions under Section 80C are available only in the year when the construction is completed, not during the construction phase.
### **Recommendation:**
- **Documentation:**
- Ensure proper documentation of all loan repayments and construction details. This will help substantiate your claims for deductions.
- **Consult a Tax Professional:**
- For specific cases and to ensure compliance with the latest tax laws, consulting a tax professional or chartered accountant is advisable.
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