03 March 2016
what is tax treatment if house property loan is in joint name & all installments paid by one person then what is tax treatment for interest & principle payment
04 March 2016
The taxability of house property depends upon ownership ratio. In case there are two co-owners with 50% share each. The annual value of property will be calculated and will be divided in ownership ratio. Now the deduction of interest on house property will be available to each co-owner seperately.
Joint loan is genreally given by bank for their own safety as number of person responsible for payment gets higher. In case, loan is in joint name but all installment are paid by one person only, it appears that this person is main borrower.
Section 80C allow deduction for repayment of principle amount of housing loan on actual payment basis. As only one person is making repayment of housing loan, entire benefit can be claimed by him only.
As far as section 24(b) is concerned, it allows deduction on accrual basis i.e. the amount payble for interest will be allowed under house property.
In my opinion, as only one person is making payment of all installments, he may claim the entire deduction for interest accrued on home loan.
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