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Income from house property

10 June 2016

Land is owned by A, She constructs a house on the land and a loan is obtained jointly from a bank by A and her daughter towards the construction of the house. The house is in the name of A. Can her daughter claim the 50% benefit of interest from house property towards the loan of house construction while filing her return.

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7 Replies

CA JINAL SHAH (IN PRACTICE) (165 Points)
Replied 10 June 2016

Without ownership of House, she is not entitled to claim Interest

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Ashok J (CA Final) (880 Points)
Replied 11 June 2016

mere regn is not a determinig factor of ownership..as long as a person pays int on loan frm his own source of income, he is lawful owner of property...

CA MANISH BINDAL (CHARTERED ACCOUNTANT ) (535 Points)
Replied 11 June 2016

Each co-applicant can claim deduction for interest paid by them as a joint loan taken.

The very first condition is the house property has to be bought by the individuals jointly, and this should be in their joint names.
The share of each holder should be clearly mentioned so that there is absolute clarity on the percentage ownership of each co-owner.

Hence as per above provision for claiming interest deduction both loan and property must be in the joint name.

Ruchi (CA) (1410 Points)
Replied 11 June 2016

Being a co borrower in a home loan doesnt gives a person ownership of the property. And ownership is must to claim any deduction or benefit. Hence, no , the daughter cannot claim any benefits.

Ashok J (CA Final) (880 Points)
Replied 12 June 2016

ok..so second part of my reply is incorrect...sorry....i fully agree co borrower wil not get any ownership rights....its only for security purpose.....further as per karnataka hc judgment, mere regn of property is not a decideing factor whether there id material available on record to prove that some other person has paid purchase consideration n property is regd is some one else's name