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Housing loan deduction issue

Raman (Salaried) (78 Points)

08 September 2008

Hi Gurus,

Can you through some light in this situation.

Facts

1) Housing Loan taken by two brothers jointly in ratio of 50:50 during PY - 2008-09.

2) Possession for property taken in PY - 2008-09 itself.

3) Loan repayment made by one brother only as of now. Starting Apr-09 both the brothers will repay the loan jointly.

Question - For PY - 2008-09

A) Whether both the brothers can claim interest deduction in the ratio of 50:50?

B) Or only the person paying is eligible for deduction?

Pls clarify.

TIA

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8 Replies

CA Gaurav Gupta (Practice) (307 Points)
Replied 08 September 2008

deduction in respect of int. will be availabel to both u/s 22 since the property is self occupied.(income U/H house property)

deduction for the repayment of principal amt U/S 80C will availabel to one brother who will make Repayment.

FOR DETAILS PLEASE REFER RESPECTIVE SECTIONS.

Originally posted by :Raman

Hi Gurus,
Can you through some light in this situation.
Facts
1) Housing Loan taken by two brothers jointly in ratio of 50:50 during PY - 2008-09.
2) Possession for property taken in PY - 2008-09 itself.
3) Loan repayment made by one brother only as of now. Starting Apr-09 both the brothers will repay the loan jointly.
Question - For PY - 2008-09
A) Whether both the brothers can claim interest deduction in the ratio of 50:50?
B) Or only the person paying is eligible for deduction?
Pls clarify.
TIA

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Raman (Salaried) (78 Points)
Replied 08 September 2008

Can IT officier deny deduction regarding intt due to the fact that loan repayment is made by one brother only?

CA Rajesh S (Chartered Accountant) (1581 Points)
Replied 08 September 2008

u have mentioned that the loan is taken 50 : 50, what about the ownership? is it also 50:50 between the brothers ?

the deduction always depends on the ownership

Raman (Salaried) (78 Points)
Replied 09 September 2008

Ownership is also 50:50

Sagar Kapoor (Chartered Accountant) (34 Points)
Replied 22 September 2008

Hi,

The deduction is based on ownership only.

In this case the deduction of Rs 100000 under sec 80 will be apportioned between both the brothers in the ownership ratio ie 50:50.

And the deduction of Rs.150000 under section 24 for the interest amount will be available for Rs 1.5L for both the brothers individually.

Thanks!!!!

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Mahendra (Chartered Accountant) (53 Points)
Replied 21 October 2008

Originally posted by :Raman
"	Hi Gurus, Can you through some light in this situation. Facts 1) Housing Loan taken by two brothers jointly in ratio of 50:50 during PY - 2008-09. 2) Possession for property taken in PY - 2008-09 itself. 3) Loan repayment made by one brother only as of now. Starting Apr-09 both the brothers will repay the loan jointly. Question - For PY - 2008-09 A) Whether both the brothers can claim interest deduction in the ratio of 50:50? B) Or only the person paying is eligible for deduction? Pls clarify. TIA	"

only the person who is paying interest is allowed to take deduction on such interest amount actually paid. So this deduction is on payment basis. If only one brother pays the interest he allowed to take duduction proportionately on his loan amt (i.e.50%)

praveen (Chartered Accountant) (6971 Points)
Replied 21 October 2008

Originally posted by :Mahendra
"		"

Interest can be claimed as deduction in 50:50. As interest is allowed as deduction on accrual basis and not on payment basis.

Ashish M (Chartered Accountant) (2731 Points)
Replied 22 October 2008

IN the above query,.

Both the persons can claim the interest whether the second brother has started paying the interest or not...as the ACt uses the words "the amount of any interest 'payable' on such capital".

And as for the amoutn of deduction they are enhtitled to have; Explanation to Sec.26 clearly provides that in case of co-ownership, each person shall be individually assessed for the relief for his portion only....

hence each of the brothers shall be entitled to have a deduciton fo Rs.150000