• Housing loan & tax benefits on father's property

Hello,
I am planning to demolish and reconstruct my house. The land is in my father's name. Will I be eligible to take a loan on that land being my father is a co-borrower. If yes, then will I be eligible for Tax Benefits for the loss of EMI.
Asked 2 years ago in Property Law from Coim, Tamil Nadu
Religion: Hindu
1) since land and house is in your father name your father would be eligible to take loan against property . 

2) you can be a co applicant of loan since your father may not be granted loan if he is a senior citizen 

3) your father can also execute sale /  gift deed in your favour  for 50% share in the house  

4) if you are then reconstructing the house and paying EMI then you would be eligible  to claim tax benefits for loan repaid by you 
Ajay Sethi
Advocate, Mumbai
38916 Answers
2184 Consultations

5.0 on 5.0

in case  any loan taken jointly with father  or singly, you will not be entitled to get any tax benefits of principal repayment u/s 80C and interest deduction u/s 24b even if  you  serve the loan repayment from your  income. It doesn’t matter whether you  makes all (or part of) the repayments. It is even immaterial whether you are  a first applicant or sole applicant or not an applicant at all. To claim tax benefits, you  needs to be the owner (or co-owner) of the property 
Ajay Sethi
Advocate, Mumbai
38916 Answers
2184 Consultations

5.0 on 5.0

1. Is your father alive? 

2. You have stated that your father is a co-borrower. Who is the other co-borrower?
Ashish Davessar
Advocate, Jaipur
21859 Answers
595 Consultations

5.0 on 5.0

1) your father can make a will bequeathing the house to your sister if he so desires 

2) your father cannot sell , gift , transfer or create third party rights on the house without bank consent 
Ajay Sethi
Advocate, Mumbai
38916 Answers
2184 Consultations

5.0 on 5.0

1. Interest on home loan can be claimed as a deduction subject to a maximum of 200,000 INR (Rs.150000/- up to A.Y. 2014-15), or the actual interest repaid whichever is lower. 

2. Principal can also be claimed up to the maximum of 150,000  INR. So you should be able to claim these deductions. 

3. Unless and until the loan is repaid in entirety neither you nor your father will be able to transfer the property. 
Ashish Davessar
Advocate, Jaipur
21859 Answers
595 Consultations

5.0 on 5.0

It is advisable to get the property transferred in your name properly either by executing a registered gift deed or settlement deed in your favor.  By this you can relieve your father from becoming a co-borrower and also you can be free about the future that your sister cannot claim any right in it being your own property. 
T Kalaiselvan
Advocate, Vellore
28885 Answers
301 Consultations

5.0 on 5.0

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