What will be the income tax benefit if I have taken two home loans for two seperate properties?
June, 29th 2021
I have an existing home loan for a property in Mumbai, in which my wife and I are co-borrowers. I took a loan of Rs 1 crore in 2016, of which Rs 30 lakh is outstanding. Now I have to move out of Mumbai. I am planning to buy a new home in the city I am moving to and need a home loan. If we buy this new place (co-owned by me and my wife), how will the income tax benefit work out?
Amit Maheshwari, Partner, AKM Global replies: In case you intend to claim both properties as self-occupied, then benefit of interest deduction is restricted to Rs 2 lakh each for co-owners in a year. This limit shall be aggregate limit for all self-occupied properties. However, in case of let out property, there is no upper limit for claiming interest. However, losses which could arise on account of such interest can be set-off against other income to the extent of Rs 2 lakh onl ..
Shubham Agrawal Senior Taxation Advisor, TaxFile.in replies: The Income Tax Act gives a list of relatives from whom you can receive gifts without any tax incidence. Son is included in that list. Therefore, there will be no tax on this transaction. Clubbing provisions do not apply to gifts given to parents. Therefore, the interest earned on this sum will be taxable in your wife’s name.