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House loan interest

SANJEEV KUMAR (Finance professional) (227 Points)

24 March 2014

One of my employee has taken housing loan as co-applicant with wife and paying interest and principal fully from his salary since his wife is housewife and had no income. Property is held only in the name of wife.whether husband can claim deduction of interest and principal from his income?

Somebody was telling that since the husband is paying total amount, the wife's income will be clubbed with husband income here and so he can claim interest and principal as deduction.

Pls guide.

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10 Replies

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 24 March 2014

Dear Sir

Interest paid on house loan will be allowed to owner of the house property (Wife) and cant be given to husband. The case you mentioned will not come under clubbing of income. I suggest you to take more replies here as may be you get some other ways to deal with it.

Regards

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Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 24 March 2014

If the payment is made by husband out of his income how come deduction is allowable to the wife though the property is wife's name. I am not sure though.

Regards,

CA SUDIPTA SINHA (Commerce Coaching- Accounts Cost FM) (735 Points)
Replied 24 March 2014

The concept of deemed owner shall be applicable here. If husband and wife are co applicant and both are earning and also they are co owner of the property then both of them can avail of the benefit of interest. But in this case wife has no income, therefore husband is the deemed owner of the property. He can claim deduction of interest on loan.