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Jointly owned sop-can we claim int on loan>150000 ?

CA Abhishek Singh (practice) (2105 Points)

29 June 2013

Hello everyone,

Mr. X and Mrs.X has a residential house property in joint name. total interest paid in previous year 12-13 is Rs.300000/-

can Mr. X and Mrs. X claim deduction u/s 24b Rs.150000/- each in their income tax return ?

waiting for the views of the experts.

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4 Replies

Aazim lakhani (Software Engineer) (46 Points)
Replied 29 June 2013

Hi Abhishek,

It depends upon the ratio in which Mr & Mrs X are paying their EMI's. So, if they both are equally contributing, then yes, both can avail tax equal tax benefit, as explained in the example

Regards,

Zim

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CA Vinay parmar (Chartered Accountant) (1318 Points)
Replied 29 June 2013

Yes Abhishek, both of them will get the benefit u/s 24b upto Rs.150000/- individually as well as Rs.100000/- u/s 80C individually, it all depends upon the ratio in which they are paying EMI, if the EMI is debited from any one account and if the other person wants to take the benefit of the same then they should enter in to Mutual agreement between them the same i am providing to you for your refrence below:-

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CA Vinay parmar (Chartered Accountant) (1318 Points)
Replied 29 June 2013

Standard draft for home loan sharing agreement

This agreement is made on ____ day of _________ 2003 between Mr. __________________ having a place of residence at ____________________(hereinafter referred to as the First Party) and Ms. _____________________ having a place of residence at ____________________(hereinafter referred to as the Second Party) (the First Party and the Second Party jointly being referred to as Parties hereinafter).

Whereas the Parties have jointly bought a house property being ________________

_______________________________ (hereinafter referred to as the House Property) vide an agreement dated _________ entered into with _____________________ (hereinafter referred to as the Purchase Agreement).

Whereas the Parties have jointly taken a loan of Rs. 80 from ABC Bank (Bank) vide loan agreement dated __________________ (hereinafter referred to as the Loan)

Whereas the Parties are desirous of laying down their mutual rights and obligations.

Now this agreement witnesses as under:

1. The beneficial ownership of House Property and the manner of funding is as is as under:

Cost of the House Property = Rs 100

	First Party	Second Party
Share of each party in ownership	40%	60%
Cost contributed by each party	40	60
Share of loan	40	40
Own contribution made vide	0	20
Cheque Number

2. Each party acknowledges the share of the other party in the House Property and acknowledges receipt of the own contribution made by the other party.

3. The First party agrees to pay the installment amount due on the Loan as per schedule 1 enclosed and the Second Party agrees and confirms that it will duly reimburse its share of the installment on the same due date to the First Party. The First Party will be entitled to claim interest @ 18% p.a on any delays beyond 5 days from the due date for receipt of this reimbursement. The First Party will be fully liable for any delay in payment of installment to the Bank provided the Second Party has paid its share of the installment in time. Otherwise Each party will be liable to bear any interest/cost/penalty payable to the bank prorata to the extent of any delay by either party.

4. Both Parties agree to share any income that arises from the House Property in proportion of their share in the ownership.

5. Both Parties agree to claim tax benefits on repayment of the Loan only in proportion to their share of the Loan.

6. Both Parties indemnify each other against any cost/expenses/penalty/interest that may be borne by the House Property/the other party due to the default of one of the Parties.

As a token of their acceptance to the above both Parties have signed hereunder:

_______________________ _____________________

(First Party) (Second Party)

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Member (Management) (325 Points)
Replied 30 June 2013

Simply ask both the co-owners to pay half the amount of EMI each. If that can be arranged, then, there should be no problem. Section 27 provides for deduction of 150000 in each co-owner's hands.