Interest on let out property co-owned
This query is : Resolved
09 January 2011
Hi,
Request advice:
Say, I (A) have a property that's co-owned with B & C, and our ownership share isn't mentioned on the regsistered Agreement of Sale. Now, this property is let out say for Rs. 9,000/- p.m. for 10 months, and I (i.e. A) am repaying entirely a loan thats taken to finance the property. Say the Interest for the FY comes to Rs. 75000/-. Is my share of the loss from the property Rs. 54,000/- [(90,000/3*0.70)-75,000], while B and C are taxed on property income of Rs. 21,000 each? Am I right in assuming this?
Request advice:
Say, I (A) have a property that's co-owned with B & C, and our ownership share isn't mentioned on the regsistered Agreement of Sale. Now, this property is let out say for Rs. 9,000/- p.m. for 10 months, and I (i.e. A) am repaying entirely a loan thats taken to finance the property. Say the Interest for the FY comes to Rs. 75000/-. Is my share of the loss from the property Rs. 54,000/- [(90,000/3*0.70)-75,000], while B and C are taxed on property income of Rs. 21,000 each? Am I right in assuming this?
10 January 2011
Since respective shares of the co owner are not definite and ascertainable, income will be taxed in the hand of person receiving the rent.
However, A will get full deduction of interest paid by him.
However, A will get full deduction of interest paid by him.
10 January 2011
no you cannot claim the interest expense in full and offer only a proportionate share of income.
Your interest expense should also be on the lines of the share of income.
Your interest expense should also be on the lines of the share of income.
10 January 2011
In the absence of specific allocation of share in the Title Deed, the property is supposed to be owned by all three in equal proportion. So I opine that only 1/3rd of Rent and 1/3rd of Interest should be considered for tax purpose in the assessment of Mr A
10 January 2011
Thanks, friends. Believe though that there is no clause that stpulates the splitting of income tax benefits. So, in perspective, am I not eligible to claim the entire interest amount paid by me as an IT benefit?
12 January 2011
as suggested by CA Shailesh Kumar Bhagat .. the amtching concept may be adopted here
13 January 2011
Thanks, but I'm not sure what matching concept you are referring to, her. Could you please clarify?
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