Need Expert Advice?Our Gurus Can Help

Mihir Tanna |1018 Answers |Ask -Follow

Tax Expert - Answered on Jul 07, 2023

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more

Question by Sarvesh on Jun 20, 2023Hindi

Hello Sir, Me and and my spouse had bought a flat in 2021. We took a housing loan from BOI and we are paying almost 2.5 lakh per annum as a interest on the loan. Both of us are tax payers. My question is, while filing a income tax, can I declare 2L as interest on housing loan and my wife can declare a 50k as interest on housing loan. Or the interest amount should be equally divided among us?

Ans: Deduction for interest on housing loan is allowed based on proportion in which loan is repaid. However, in case of husband and wife, if loan is repaid from joint account and both are contributing money to said account for loan repayment as well as other household expenses, interest can be claimed in different proportion as one can contribute more for housing loan.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

MoneyReply

You may like to see similar questions and answers below

Anil Rego |388 Answers |Ask -Follow

Financial Planner - Answered on Jun 09, 2022

Question by Srinivas - Jun 09, 2022Hindi

My wife and I have booked a flat costing Rs 150 lakh. I am retiring in July 22 and my wife on dec 26; both are salaried and are in 30% income tax bracket. We plan to take a home loan of Rs40 lakh payable in the maximum limit allowed by sbi/hdfc /bank of india /axis bank (from whom we are planning to take home loan) we have made our daughter as the third owner but she is not contributing anything. My income tax for 20-21 was Rs 3.27 lakh and of my wife around Rs2 lakh. Please let me know whether we have to show % of our share of investment in the sale deed or agreement or can we simply leave it without mentioning anything. In both cases how much can we pay towards interest and principal on home loan to get maximum income tax benefit? Do you suggest to include our (unmarried working) daughter also for contribution so that she can also get income tax exemption? Expecting detailed reply from your end at the earliest.

Ans: To claim the tax benefit on the property for you and your spouse or you, your spouse and your daughter, you need to fulfill certain criteria:

1. The person who wants to claim tax benefit (be it spouse or daughter) must be an owner of the property. Hence, there should be joint ownership of the property

2. The joint owner should also be an applicant for the loan. Owners who are not borrowers and do not contribute to the EMI shall be devoid of the tax benefits.

So, under section 80C, each co-borrower can claim a tax deduction on the principal component of the EMI. Also, each co-owner who is a loan co-applicant can claim a maximum tax deduction of Rs 2 Lakh for interest on the loan.

This will be based on the owner’s proportion of their stake in the property. You can choose to define the percentage in the sale deed or leave it without mentioning anything.

If you have not mentioned, you need to be consistent in the split across the years. The most common practice is to assume it as 50%.

Money

Mihir Tanna |1018 Answers |Ask -Follow

Tax Expert - Answered on Apr 14, 2023