Tax Exemption for Joint Property

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Rajat

India

76 Points Posted on 25 February 2010

Although it may sound a silly problem to most of you but I have not been able to get a satisfactory answer from most of the online forumss.
Please Help me

Background :
My mother owns a flat in Delhi where we are living and she is the owner of the house with no Loans taken for this house in which we live.
I dont own any house anywhere in India other than the one discussed below

Me and my mother have booked a flat with a builder under the joint name which is under construction and will be possesed by us after 4 years. The payment is being made on construction link basis.
For the new flat we have a bank loan for which I and my mother are the applicant . The EMI have already started as bank has contributed towards the initial payment and some of builder installments
I want to know the tax exemption which :-
1. I can claim
2. Which my mother can claim considering she already owns a flat(in which we are residing)
3.Moreover if the EMI is paid only from my mother`s bank account and later she receives 50% of the EMI amount from me

Replies (2)

Amir

Learner

4016 Points Posted on 26 February 2010

Dear Rajat,

Mere Joint ownership will not do, what is necessary is that the shares of Joint owners should be clearly defined as required byb Sec 26..

Tax Benefits (Interest + Principal) regarding New House will be available only from the year in which construction is completed..

Further whether it will be available to u or ur mother or both will depend upon the fact who makes the payment.. I mean do u have any source of earning.???

Since u said that payment will be made by ur mother, in that case only she will get the benefit. The fact that she already owns one property would not affect this benefit only thing is this new property will be considered as deemed let out & it's expected rent(to the extent of ur mother's share) will be taxable even if it is lying vacant.

Now if at later date u give 50% of money to ur mother???

Bhai,the tratment calls for the fact to be identified that whether u r purchasing 50% of share from ur mother or u r simply discharging loan to ur mother.........Difficult to establish......?? Documents would be required like "Loan agreement" between u & ur mother, etc

apoorv

article assistant

35 Points Posted on 26 February 2010

Amir I feel that if the loan agreement is in the joint names, and the share of the party's is identifiable and the bank can issue the loan and interest repayment certificate in the name of both the parties then both the applicant can claim the benefit u/s 24(b) as well as 80C