income from house property

[HIMANSHU JARIWALA]

Dear all, If husband acquire house property in the name of wife and take housing laon in the name of wife. Repayment of loan is made by husband from his bank account. Question is weather husband claim deduction of interest on repayment of housing laon u/s 24 and principal repayment under sec. 80C from his income as wife is not filing income tax return as she is house wife.? pls advise.

[Surender Gupta]

Technically speaking, deduction can be claimed only by the owner of the property. But, the provisions of section 64 read with section 27 supports you to claim that the income from such house property is taxable in your hand. Therefore, you may avail the benefit. See Madras HC decision in the matter of S. M. A. Siddique Versus Commissioner Of Income-Tax, Madras (2008 -TMI - 28059 - MADRAS High Court) - https://www.taxtmi.com/caselaws?id=28059 But, wile taking the benefit of this situation, be careful, all future benefits, gains from the house property would be taxable in the hands of husband.

[NANDKUMAR SAGWEKAR]

Kindly see the provision for claiming deduction u/s 24 for Interest and U/s 80 c for principal amount. House must be owned by the person who claim deduction u/s 24 and u/s 80C.

[Darshan Jain]

As per s.80C(xviii) only repayments of amount borrowed by the assessee is deductible. Since, in this case amount is borrowed by wife, deduction cannot be claimed by husband. The wordings of the said section is unambiguous and therefore as Shri Surender Gupta has opined, deduction should be claimed only after carrying a cost-benefit analysis, which may also incl the cost of litigation..

[DEV KUMAR KOTHARI]

Husband acquired house property in the name of wife - i believe it is disclosed in Balance Sheet of husband.So wife is agent or trustee of husband, the beneficial owner being husband. Housing loan is taken in the name of wife- again here wife is agent or trustee of husband. Repayment of loan is made by husband from his bank account- the loan is of husband though in the name of wife- so he can claim all benefits. All circumstantial evidences should be made available to show that the husband is real and beneficial owner of house and wife is agent or trustee to hold property in her name but on account of husband. In case of an individual there can be even an undisclosed agent - the wife being an agent it can be declared publicly and officially. Wife can file a declaration and convey the property in name of husband the real owner.

AI Summary

Ownership and beneficial ownership determine entitlement to housing loan deductions; beneficial owner may be taxed and claim benefits. Deductions for housing loan interest and principal depend on legal ownership and borrower status: ordinarily only the owner/borrower can claim them. If the husband is treated as the beneficial owner or the wife is a trustee/agent for him and income is attributed to him, he may obtain the tax benefits; otherwise literal borrower/owner requirements and litigation risk may prevent him from claiming deductions.