Housing Loan Deduction

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Soumya lakshmi (Querist)
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19 July 2010 Mr & Mrs.X have taken a housing loan jointly.Mrs.X is the owner of the said property. Can Mr.X claim deduction of housing loan principal repayment u/s 80C?

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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19 July 2010 In case of Income Tax Act ownership of any property is not determined on the basis of registree. But who made the payment for the property is considered to be owner u/s 27. If Mr. X actually made the payment of the principal amount then he shall get deduction u/s 80C

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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19 July 2010 Deduction for interst on home loan is allowed agaisnt Income form house property.

The person who is not owner of house, how he can showm income from it and how he can claim deduction from it.

As per section 27,
Following person can be deemed owner

an individual who transfers otherwise than for adequate considera-tion any house property to his or her spouse, not being a transfer in connection with an agreement to live apart, or to a minor child not being a married daughter, shall be deemed to be the owner of the house property so transferred;

(ii) the holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate ;

1[(iii) a member of a co-operative society, company or other association of persons to whom a building or part thereof is allotted or leased under a house building scheme of the society, company or association, as the case may be, shall be deemed to be the owner of that building or part thereof ;

(iiia) a person who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882), shall be deemed to be the owner of that building or part thereof ;

(iiib) a person who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or part thereof, by virtue of any such transaction as is referred to in clause (f) of section 269UA, shall be deemed to be the owner of that building or part thereof;]

Section 24:-
Deductions from income from house property.

24. Income chargeable under the head "Income from house property" shall be computed after making the following deductions, namely:—

(a) a sum equal to thirty per cent of the annual value;

(b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital:

Provided that in respect of property referred to in sub-section (2) of section 23, the amount of deduction shall not exceed thirty thousand rupees :

Provided further that where the property referred to in the first proviso is acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and such acquisition or construction is completed 2[within three years from the end of the financial year in which capital was borrowed], the amount of deduction under this clause shall not exceed one lakh fifty thousand rupees.

As per my opinion, Mr. X is taking deduction only if he has tranfer his house to his wife without any adequate cosideration or if he is co-owner .
Both are not there. Hence no deduction to MR. X.

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