Deduction of Interest on Housing Loan in case of co ownership

Deduction of Interest on Home Loan: 

IF home loan is taken for the purpose of purchase, construction, repair, renewal or reconstruction, interest there on is allowed on accrual basis under section 24 of Income tax Act,1961. However in case property held by co owner,deduction of Interest on Housing Loan in case of co ownership is allowed to each co owner.

As per section 24 of Income tax Act, Maximum amount of Interest  permissible in case of self occupied property is Rs.1,50,000 per co owner subject to actual Interest paid if the following conditions are satisfied;

1. Home loan is taken on or after 1st April, 1999 for acquiring or constructing a property.
2. Loan taken prior to 1st April, 1999 is eligible for maximum deduction of  Interest up to Rs.30000 only.
3. Acquisition/Construction should be completed within three years from the end of financial year in  which capital is borrowed. e.g. loan is borrowed on 2nd July, 2005 hence acquisition or construction should be completed by 31st March, 2009 i.e. three years from 31st March, 2006.
4. Person has to certify that Loan is taken for acquisition or construction of house or to repay principal amount outstanding under previously taken loan for acquisition or construction.
5. However for repairs, renewal or reconstruction maximum deduction of Rs.30000 is allowed and not Rs.150000.

Co ownership
E.g.IF person and his wife is co owner of house property then deduction of interest on housing loan in case of co ownership will be Rs.150000 allowable to both husband and wife. Please note following points in this regards;
1. Ceiling of Rs.150000 is set for Self occupied property.
2. Persons should be co owner of property and their names should be mentioned in registered sale deed.
3. Their share of property should mention in sale deed in the absence of any such information ownership deemed to be equal between all co owners.
4. For claiming home loan interest deduction, each co owner must have taken loan jointly.
5. If persons have taken loan from more than one bank but for the same house property then also deduction is allowed.

Apart from Home loan interest deduction, persons can claimed deduction U/s 80 C for repayment of principal on home loan within overall limit of Rs.1,00,000 per person.

Print Friendly, PDF & Email
Tagged with: ,
2 comments on “Deduction of Interest on Housing Loan in case of co ownership
  1. Anurag Kumar says:

    Dear Sir,

    Your submission is very helpful. Sir, in case of co- owner ship i have a query. Please suggest me :-

    Two brother A & B have two house property. In these house property both are co-owner and taken house loan also in joint name. However they are paying loan amount in such manner-

    House One- By A ( House one is let out)
    House Two- By B ( Self Occupied)

    My question is whether Both Mr.A & Mr. B can claim maximum amount of deduction u/s 24. Ie. Interest amount actually paid by Mr. A for house one and Rs. 150000 by Mr. B for the house two.

    Whether they should sign any affidavit/will deed for future in regard to ownership concern because they does want share in other house property ie. they want ownership of house property in which they are currently living.


  2. Vipin Prasad says:

    One property is purchased by husband and wife(Co-owner) from one seller exceeding Rs.50lac.
    and entire TDS on it @1%, was paid by Husband but as per Income Tax Act TDS should be paid by both husband and wife,

    So how can i correct this mistake,
    Please solved this query as soon as possible.

Leave a Reply

Your email address will not be published. Required fields are marked *


This site uses Akismet to reduce spam. Learn how your comment data is processed.