Saturday, June 27, 2009

Only House Owner can Claim Deduction u/s 80C

I Work in an IT Company and took a housing loan from HDFC Bank. I am the co-applicant. The property is in my mother's name but she is a housewife and i pay all EMIs. Am I eligible for tax benefit ?

A Deduction under section 80C of the act toward the payment made by way of repayment of amount borrowed by the assessee from the bank for the construction or the acquisition of a residential house is allowed to a person who is the owner of the residential house. in your case, the owner of the house being your mother, you would not be entitled to any deduction under the saidsection.

Q. I took a loan in my wife’s name for buying a house in her name. I am a salaried employee and I have been repaying the EMIs on the said loan out of my income. Can I claim the deduction under Sections 80-C and 24 in respect of the principal repayment and the interest on the housing loan?

A. The deduction under Section 80-C in respect of the principal repayment and under Section 24 in respect of the interest on the housing loan can be claimed by the owner of the property.

The question therefore will be whether you are the owner of the house property for the purpose of the claim under these sections.

You may note that the ownership in this context does not refer to the registered ownership but to the real ownership.

In your case if you are able to show on the facts that you are the real owner of the property, the deductions will be available to you though your wife is the registered owner of the property.

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