CA Khyati Pithadia (Chartered Accountant) (173 Points)
14 June 2014My question is that
1. If home loan is taken in the name of 2 persons, both filing income tax returns, then whether interest and principal component paid is taken as deduction 50%-50% by both the peson ?
Whether it is feasible or not ?
If not what treatment can be given....
2. If loan is taken in the name of 1 person and the other person is as co-applicant, then co-applicant of loan can take deduction regarding principal and interest component ?
C.A. Jignesh N. Mehta
(C.A.)
(1030 Points)
Replied 14 June 2014
Deduction of interest is allowable only if principal component is paid by the assessee.
Even in joint ownership if full payment is made by co owner 1 then deduction will be allowed to co owner 1 only.
Hence it is necessary to establish that payments are co related with interest - so that there is no difficulty in justifying the claim made before the assessing officer or any other compitenet authority.
Regarding feasibility of interest and principal claim is concerned it depends on income of the assessees. If both share same income then it is feasible to share the interest as well as principal.
But if the income of one is higher than the other and taxable at a higher rate then the deduction should be availed by that person liable to higher rate of tax.
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