IF HOUSING LOAN IS JOINTLY BORROWED, BOTH CAN AVAIL DEDUCTION UNDER SECTION 24(6)
US Antil: Kindly clarify the limit of deduction/rebate available under Income Tax Act in following cases:
Interest on housing loan under section 24(6) – Can both husband and wife claim the deduction of interest upto Rs. 1,50,000 on housing loan in joint ownership? Can husband claim the deduction of interest upto Rs.1, 50,000 housing loan in case of wife’s ownership whereas both are in service and loan is taken jointly? Payment of rent under section 10(13A) – Whether dearness pay is also to be taken into consideration in addition to basic pay while claiming the exemption of HRA in the following cases:
a. Where fixed HRA is received according to slabs of basic pay (Haryana Government employees).
b. Where HRA is received according to the percentage of basic pay & dearness pay (Central Government employees).
In the case of joint ownership of a flat, where the housing loan is borrowed jointly, the deduction under section 24(6) in respect of interest on housing loan will be allowed to both the co-owners, if the total interest paid on housing loan for a year is more than Rs.3 lakh, each of the co-owners will be entitled to claim deduction upto Rs. 1, 50,000 on account of such interest. As per Rule 2A of the Income Tax Rules, for the purpose of computation of deduction under section 10(13A) in respect of house rent allowance, the salary includes basic pay as well as dearness allowance if the terms of employment so provide.
Courtesy: - Hindustan Times – 2 July 2008
