Tax queries on let-out property having home-loan and co-owners

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  1. AVL1975

    AVL1975 New Member

    - Property A:
    (i) Two co-owners - C1: 50%, C2: 50%
    (ii) Two co-borrowers (Loan certificate 1 from Bank X)
    (iii) Let-Out for all months
    - Property B:
    (i) Four co-owners, - C1: 25%, C2: 25%, C3: 25%, C4: 25%
    (ii) Four co-borrowers (Loan certificate 2 from Bank X)
    (iii) Self-Occupied for all months

    - Property C:
    (i) Four co-owners, - C1: 25%, C2: 25%, C3: 25%, C4: 25%
    (ii) Paid-off i.e. no loan
    (iii) Let-Out for all months

    3) All interest is paid in 100% by C1. C1's bank account pays all EMIs (it's not a joint account)

    4) All rental incomes (from all let-outs) are deposited into C1's bank account

    5) Municipality tax and standard deduction (30%) is understood in calculations

    Questions for C1's ITR-2, Schedule HP (Income from House Property sheet)
    1) For property A
    (a) can C1 maximize tax benefit by using proportional rental income (i.e. 50%) & using full interest paid (as per Loan certificate 1) ?

    2) For property B
    (a) Can C1 use full interest paid (as per Loan certificate 2) ? If not,
    (b) Is C1 interest deductions limited to 2 lacs ? If yes, can other co-owners also claim 2 lacs each (upto limit of Loan certificate 2) on their ITR-2 returns ?

    3) For property C
    (a) Can C1 claim tax benefit by using interest payments u/s 24 and/or 80C ? If yes, is there a limit to 2 lacs ?
    (b) Can C1 use interest paid to individuals (not a bank) ?
    (c) Can other co-owners claim tax benefit u/s 24 on their ITR-2 returns ?
    (d) Can we use interest paid for house property B to calculate income/loss of house property C (which is let-out) ?

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