INTEREST ON HOUSE PROPERTY

[Kishor Deshpande]

I HAVE TWO CLIENTS. BOTH ARE HUSBAND AND WIFE AND MEDICAL PROFESSIONALS. BOTH ARE FILING THEIR INCOME TAX RETURN IN INDIVIDUAL CAPACITY. THEY HAVE TAKEN HOUSING LOAN IN JOINT NAME. BOTH ARE PAYING INSTALLMENTS FOR THE SAME EQUALLY. FOR THIS HOUSING LOAN THEY HAVE PAID Rs. 3,00,000 AS INTEREST TOWARDS THE HOUSING LOAN DURING THE YEAR. NOW BOTH THEY ARE ENTITLED FOR DEDUCTION U/s 24 FOR HOUSING LOAN INTEREST FOR Rs. 1,50,000 INDIVIDUALLY OR Rs. 75,000 INDIVIDUALLY.

[NEERAJ BHUTORIA]

1[ Deductions from income from house property. 24. Income chargeable under the head "Income from house property" shall be computed after making the following deductions, namely:— (b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital: Provided further that where the property referred to in the first proviso is acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and such acquisition or construction is completed 2[within three years from the end of the financial year in which capital was borrowed], the amount of deduction under this clause shall not exceed one lakh fifty thousand rupees. 3[Provided also that no deduction shall be made under the second proviso unless the assessee furnishes a certificate, from the person to whom any interest is payable on the capital borrowed, specifying the amount of interest payable by the assessee for the purpose of such acquisition or construction of the property, or, conversion of the whole or any part of the capital borrowed which remains to be repaid as a new loan. Deduction is allowed based on certificate. If certificate is produced then the same is allowed.

[Sankar Bagchi]

Yes, so long both husband and wife has seperate source of income, the principal amount of loan can be claimed as rebate under Section 80C to the extent of Rs.1 laac each and similarly interest of loan under Section 24 can be considered as reduction under "income from house property" if self occupied, in proprtion of their ownership to the maximum limit of Rs1.50 lacs for each individual and in case of rent in proportion of their ownership without limit.

[CA.Mohammed Lakkadsha]

Yes, Both Husband and wife can claim interest to the exent of limit prescibed under proviso to 24(b) i.e 1.5 lacs if other conditions are fulfilled. Also bith can claim benifit u/s 80C for repyament of housing loan of their respective share of housing loan subject to maximum limit prescribed.

[DEV KUMAR KOTHARI]

Yes, both can claim benefits of S.80C and 24. If the house is partly used for professional purposes ( which is likely - like chamber, patient examination room, nurse room, conference room etc.)also, then relevant reasonable deductions can be claimed against professional income for interest, depreciation, repair and maintenance,furnishing electricity etc. In such cases it is always advisable to demarcate area and have separate loans, to avoid controversies and confusions.

[Sathish Kamath]

Is there any decided case law or CBDT circular on above subject?

AI Summary

Deduction for housing loan interest: spouses may each claim interest and principal benefits when conditions and ownership apportionment are met. Entitlement to interest deduction on a jointly-borrowed housing loan arises under Income From House Property; each spouse may claim interest in proportion to ownership and subject to the proviso cap for self-occupied property, contingent on producing the lender's certificate where required. Principal repayment can be claimed by each spouse for their share under the investment-linked deduction rules. If part of the house is used for professional purposes, expenses attributable to that portion may be claimed against professional income when areas and usage are reasonably demarcated.