You can execute sale deed for 50 per cent share of flat in wife name
sale deed should be duly stamped and registered
Adding spouse name to sale deed to avail income tax benefits
I have taken a flat in the year 2018. I have registered it on my name as my wife is pregnant during that time and on maternity leave. In 2019 she has resumed her job but she cannot avail the income tax benefits even though she is co-borrower of the loan as her name is not there in the sale deed. How can she avail the tax benefits as we both are working and duly filing the income tax every year.
Asked 4 years ago in Taxation
17 Answers
Please file additional amendment to the Registrar where sale deed was registered to be made part of the sale deed then she will be able to avail the benefit.
1. The sale deed is already executed and her name is not present in same therefore now name in sale deed cannot be added.
2. She cannot get tax benifit as she is only co-borrower and is not joint owner in the property.
You both can file income tax return as combine under HUF and you become karta of the family so the clubbed income and you will get benefits of HUF.
Get the name added in the deed via a rectification application.
Than get the name updated in the loan account
Ownership’ in the property is a pre-requisite to availing any tax benefits against the property. You may have taken the loan jointly, but unless she is an owner in the property, she may not be entitled to the tax benefits.
Rectify sale deed and include her as joint owner.
If on paper the name of your wife is no where in relation to purchase of this flat nor did she contribute you anyway while purchasing this flat then on this account, I regret, she can not get exemption in her income tax returns.
Dear Sir,
You may add the name of the wife not in the sale deed but as addendum to it.
If she is not the co-owner and not taken loan for the said property she can't avail the tax benefits
- Legally you cannot add your spouse name in the sale deed already done in your name .
- However, being the legal owner of the property , you can gift 50 percent portion of the property in her name after executing a registered Gift deed.
- Hence, if you add her name by way of gift , then it is non-taxable.
- Further , if you take a house loan , then each of you can claim tax benefit under section 24 of the Income Tax Act and also separately claim the tax benefit u/s 80C for repayment of principal under housing loan up to one lakh each.
In case the house property is self-occupied, an individual can claim a deduction of interest paid on housing loan, up to Rs 2 lakh per financial year (FY).
In such cases, under joint ownership, each co-owner will be able to avail the benefit of Rs 2 lakh per FY and the higher payments of interest can be utilised.
As per provisions of the Income Tax Act, 1961 (Act), it is possible to claim a deduction for the interest paid on the housing loan under the head "Income from house property".
Owning a house property in joint names has various tax benefits.
However, it is important to note that the house property should also be funded by each co-owner.
Also, the shares of the co-owners should be definite and ascertainable.
Income-tax authorities are increasingly scrutinising the funding and allocation of shares of the house properties where the same is held in joint names and tax benefits are being claimed by more than one individual, especially when one of the individuals is in a lower bracket.
Since she is not a joint owner, if at all she wants to avail the benefits of income tax, then you may have to sell half the property to her by a registered sale deed.
But will it be possible to sell the property during the existence of a home loan on the property.
You can talk to the bank manager to give NOC to sell half share of property to your spouse who incidentally happens to be a co-applicant/co-borrower, without which it may not be possible for you both to avail the benefits of income in this regard.
You can execute sale deed to the proportionate share of your wife's contribution by registering and paying appropriate stamp duty, as such, her name will be reflected in the sale deed. Thus, she can avail IT benefits.
Income tax provisions do not allow taking the benefit of the housing loan if the title of the property is not in the name of the assessee.
If you wish that your wife can take the benefit of the interest paid and principal for the house in that case her name should appear in the title deed and for that purpose you have to transfer the property in her name as well for this purpose you have to go for the registration of the share the property to your wife that will attract stamp duty as per the value of the property share
Now the flat is hypothecated to the bank. You should ask the bank to add her name if that is possible. Otherwise she can't get IT benefits if her name isn't there.
You can include your Spouse's name in the new sale deed mentioning the ratio or portion of the ownership and get it registered.
1. Co-borrower is not ipso facto co-owner.
2. She cannot avail tax benefits unless she is a co-owner.
You can add her name as co-owner of flat by gifting her half share.
