Anil Rego |377 Answers |Ask -Follow
Financial Planner - Answered on Jun 09, 2022
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.
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%.
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