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Deduction u/s 24(b)?

Sharad Saini (Student) (286 Points)

28 November 2011

I have a problem related to House Property.....

Four Brothers took a loan from Bank and purchased a Land and constructed house on it. They got the property regd. in the name of their mother.

Now they are paying the installments. Only 2 brothers are paying the installment contributing equally, remaining two do not contribute as they are studying and do not have any income. Property is self occupied.

Who will get the deduction of Intt paid u/s24(b) of the Income Tax Act? and how much?

Who will get deduction of principle u/s 80?

Thanx .....

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10 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 28 November 2011

The brothers repaying the Loan Installment shall be eligible to claim the deduction u/s 80C. The Interest paid shall be deductible u/s 24(b) upto Rs. 150000/-.

Regards,

Devendra

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The Other Side of a CA (XYZ) (210 Points)
Replied 29 November 2011

Hi Mr. Sharad

Under IT act, the OWNER of the house property is taxed under the head '' Income from house property''

In the given case Sons are transferring house property to mother, but since such transfer is not covered in the "Deemed Owner '' U/s 27, therefore "Income under house property" shall not form part of their income. Consequently they cannot avail deduction U/s 24(b), since the deduction is available to owner. In that case deduction can be availed by mother.

Further section 80c provides that: Deduction shall be available in respect repayment of the amount BORROWED by the assessee Sons i.e. the two sons (payer) can avail deduction under this section.

However deduction cannot be availed twice. Deduction shall be available in any one case only

4 Like

Prakash Yadav (Chartered Accountant) (124 Points)
Replied 29 November 2011

I agree with Mr. shreekant

Prakash Yadav (Chartered Accountant) (124 Points)
Replied 29 November 2011

I agree with Mr. Shreekant.

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 29 November 2011

Originally posted by : Shreekant
	Hi Mr. Sharad Under IT act, the OWNER of the house property is taxed under the head '' Income from house property'' In the given case Sons are transferring house property to mother, but since such transfer is not covered in the "Deemed Owner '' U/s 27, therefore "Income under house property" shall not form part of their income. Consequently they cannot avail deduction U/s 24(b), since the deduction is available to owner. In that case deduction can be availed by mother. Further section 80c provides that: Deduction shall be available in respect repayment of the amount BORROWED by the assessee Sons i.e. the two sons (payer) can avail deduction under this section. However deduction cannot be availed twice. Deduction shall be available in any one case only

AGREED.

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CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 29 November 2011

Originally posted by : Shreekant
	Hi Mr. Sharad Under IT act, the OWNER of the house property is taxed under the head '' Income from house property'' In the given case Sons are transferring house property to mother, but since such transfer is not covered in the "Deemed Owner '' U/s 27, therefore "Income under house property" shall not form part of their income. Consequently they cannot avail deduction U/s 24(b), since the deduction is available to owner. In that case deduction can be availed by mother. Further section 80c provides that: Deduction shall be available in respect repayment of the amount BORROWED by the assessee Sons i.e. the two sons (payer) can avail deduction under this section. However deduction cannot be availed twice. Deduction shall be available in any one case only

AGREED.

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 29 November 2011

Originally posted by : Shreekant
	Hi Mr. Sharad Under IT act, the OWNER of the house property is taxed under the head '' Income from house property'' In the given case Sons are transferring house property to mother, but since such transfer is not covered in the "Deemed Owner '' U/s 27, therefore "Income under house property" shall not form part of their income. Consequently they cannot avail deduction U/s 24(b), since the deduction is available to owner. In that case deduction can be availed by mother. Further section 80c provides that: Deduction shall be available in respect repayment of the amount BORROWED by the assessee Sons i.e. the two sons (payer) can avail deduction under this section. However deduction cannot be availed twice. Deduction shall be available in any one case only

AGREED.

Rohit Gupta (article) (47 Points)
Replied 29 November 2011

i agree wid shreekant

Sharad Saini (Student) (286 Points)
Replied 29 November 2011

Thanx for the replies sir....

But whether both sons will be able to claim deductions upto Rs. 1 Lakh each u/s 80C ?

one more thing, for getting deduction u/s 80C for principal, income from property should be taxable u/h IFHP..... since mother is the owner then income is not getting taxed in their hands then how will they claim credit?

CA PARAS BAFNA (Practising CA ) (33428 Points)
Replied 30 November 2011

As Shreekant says that the deduction is available to the owner then the things are clear. Mother only can avail benefits of Section 24 and Section 80C.

If you look at the procedural part things will automatically become clear. Interest U/s 24 has to be claimed from the Income of the House Property. Whether it be a SOP or let out. Here the property does not belongs to the sons hence they can not claim deduction U/s 24.

For getting deduction U/s 80C the condition is purchased or constructed is assoicated again with the chargeability of Income under the head IFHP in the hands of the assessee.

In this case since loan is taken by the sons so certificate of interest, which is the enabeling instrument, will be issued by the bankers in the names of the borrowers only, hence mother can not calim the entitlement of interest deduction.