Homeloan Prepayment

[Asked by Guest]

My wife will be giving me some money (Rs. 5 lacs) for prepayment of the home loan which is on my name (she is NOT a co-borrower). She will be directly giving the cheque from her account which I will be submitting to the HDFC from which I have got this loan. I have following doubts over this
(1) Would there be any Income tax related issues raised against me if my wife pays the prepayment in such way
(2) Can I claim tax benefit of such principal prepayment under 80C?
(3) Would the bank accept such cheque which is not coming from my account? (I will be checking this with the bank as well)

Thanks

[DR.MARIAPPAN GOVINDARAJAN]

The bank will accept the cheque of your wife against your loan provided your wife is to give a letter to the bank that she has given the money to her husband and also a copy of her bank statement. You can also claim tax benefit of such principal amount subject to the limitation.

[Ganeshan Kalyani]

The principal repayment benefit should be eligible under income from house property head as negative income.

AI Summary

Spousal prepayment of home loan: banks may accept payments with spouse declaration; principal repayment may be tax beneficial.
A non borrowing spouse may prepay a borrower's home loan by issuing payment if the spouse provides a written declaration and supporting bank statements, which banks typically accept to document the source of funds. Forum replies indicate the principal component of such prepayment can be claimed for tax benefit subject to the usual limitations applicable to principal repayment deductions; one reply describes the effect as producing negative income under the head of house property.