COUPLES HOUSING LOAN TAX DEDUCTION
Kochi: It is not just enough for a couple to get a bank loan if they want to get an income tax deduction in the name of housing loan; therefore, the house or plot to be built or purchased must be in the name of both parties.
This was earlier under Section 26 of the Income Tax Act but was not strictly enforced. But this is currently being implemented.
When a couple took out a home loan, both of them were entitled to an income tax deduction even if the house was in the name of one person. It was enough if the bank loan was a joint venture.
Bank loan re-payers can avail income tax deduction of up to Rupees 2 lakh in interest and up to Rupees 1.5 lakh in capital From their annual taxable income, Rupees 2 lakh in interest or Rupees 1.5 lakh in capital will be deducted. Income tax is applicable only on the remaining amount. The principle is exempt under Section 80C.
According to the Income Tax authorities, the house should be in the name of both the parties as per the legal provisions. Also, if the house is in the name of one of the couple and the loan is in the name of the other, both of them will not get tax deduction. The loan is only available to the homeowner.
INPUTS BY – VAISHNAVI BAL ON 11 th SEPTEMBER 2021