Interest deduction under business head

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 April 2012 sir,
L (husband) and R(wife) jointly purchased property for Rs. 2 crore. The first name in the sale deed is of L(husband). Later they availed bank loan to the extent of Rs.60 lakhs, the bank has given the single cheque in the name of L. Now the property is let out as commercial one and the rental income received per month is rs.1 lakh approx.Now the interest paid on bank loan can be claimed under the head income from busiiness or profession as the commercial rental income offered is under business or profession head. Please clarify? also cite if any tribunal, high court judgements are availbale.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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10 April 2012 Before allowing the interest paid to bank you have to find out the ratio of ownership and invest ment in the flat by both husband and wife. If they are equally investing in the flat then the loan taken by husband can be debited to wife 50% and accordingly the interest can be claimed. In fact the loan should have been taken jointly. The repayment of interest and EMI should be made equally from the accounts of husband and wife