Home Loan- Claiming Tax Exemption - Co-Borrower

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  1. V. Martin James

    V. Martin James New Member

    I have recently taken a Home Loan for an amount of Rs. 30.00 Lakhs for construction of a house on a property owned solely by my mother and the entire repayment will be done by me alone as my mother is a housewife. After taking the loan, I have read on a forum that a co-borrower who is NOT the co-owner, cannot claim tax exemption for repayment of Home Loan. At the moment I cannot afford the registration charges towards transfer of property from my mother to myself through a gift deed. Kindly provide your valuable suggestions on any other alternatives wherein I can claim tax exemption without having to get the land transferred to my name.
     
  2. ZED

    ZED Well-Known Member

    Not an easy way. Can you get co-ownership?


    A transaction where money belongs to someone else and property is in name of someone else is called benami transaction.
    This declaration has to be filed with your AO that property is benami and you have provided the money for acquisition of the property and hence you be treated as the owner of the property for all the purposes of the Income Tax Act.

    In case of CIT V Hasina Begum (1986) 158 ITR 215 (Cal) it was held that if the funds were provided by repayable loan, then it (Income under the head "Income from house property") shall be taxable in the hands of borrower.

    In the declaration, do give reference of the above judgement and only after submission of the declaration claim the deductions under the various provisions AND NOT OTHERWISE.
     
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