Housing loan deductions

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 October 2013
I am going to purchase a house property worth Rs 45 lacs and taking a
bank loan of Rs 30 lacs for it. I am a salaried employee and does not
own any house property in my own name. Although I have a flat
(purchased in 2008 under Power of Attorney in name of my mother). With
a pure intention to save stamp duty (of around 2% on cost of purchase)
and also to avail income tax deductions, I wish to use the following
route to acquire the above mentioned house.
Route
I will buy the house in name of my mother (registry in her name). Bank
loan will be in her name with my name as co-applicant (as she will not
be eligible for 30 lac bank loan due to her low monthly income).
Although she will use her own funds for balance portion (15 lacs, 45
minus 30).
On the date of registry, my mother will sell the house to me at same
price (or with some mark-up) through a sale agreement (this will not
be registered) and/or power of attorney in my name. Sale agreement
will also comprise that I will take over bank loan from her. Now EMIs
will be paid from my account only. Thus it will make me owner of the
house as per section 24, 27, 269UA of the Income Tax Act 1961 and i
will be eligible for income tax deduction of housing loan interest and
principal.
Instead of going for sale agreement with my mother (as stated in above
para), my mother can make a will in my favour in regard to above
mentioned house which may or may not be registered. This will make me
owner of the house as per section 24, 27, 269UA of the Income Tax Act
1961 and i will be eligible for income tax deduction of housing loan
interest and principal.
Please give your suggestion on my understandings or suggest any other option.

@VaibhavJ

@VaibhavJ (Expert)
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12 October 2013 Hi

Executing will & registering WILL give you all rights & benefits attached to the same.

PS. Registration of will is not mandatory but favourable for beneficiary.

Thanks//VaibhavJ