Can Houseloan benefit be availed by both husband and wife.

saju sathyadevan (Querist) 20 July 2011 This query is : Resolved
Can House Loan repayment amount can be taken for ded. U/s 80C by both husband and wife, if the said loan is in the name of both of them. If yes, in what proportion. Consider the repayment as 1,80,000/- and both are having savings u/s 80C of Rs. 20,000/- and 10,000/- each. Please advise.

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A V Vishal (Expert) 20 July 2011
There is express provision under section 26 the I T Act for the computation of the house property income in case it is jointly owned as in your case. The excerpts of the said provision is as under:

26. Where property consisting of buildings or buildings and lands appurtenant thereto is owned by two or more persons and their respective shares are definite and ascertainable, such persons shall not in respect of such property be assessed as an association of persons, but the share of each such person in the income from the property as computed in accordance with sections 22 to 25 shall be included in his total income.
Explanation.For the purposes of this section, in applying the provisions of sub-section (2) of section 23 for computing the share of each such person as is referred to in this section, such share shall be computed, as if each such person is individually entitled to the relief provided in that sub-section.”
In nut shell , what the aforesaid provision states is :

Each owner will be assessed according to their share in their property.
All provisions of the I T Act shall be shall be applicable separately.
In each case relief allowed under income tax shall be allowed.For example in your case , in both you and your wife case , annual value shall be nill for self occupied house.
Specific to your question, you should also note that interest on borrowed home loan is not allowable on PAYMENT basis , rather it is allowed on DUE basis. Therefore, both you and your wife can claim 50% of the interest from Nil value of property . However, the balance of payment which your wife should have done but which you did on her behalf,should be shown as loan to your wife. To minimise the confusion , best way is to open a joint account and put both yours and your wife’s salary/income in it and issue cheques of repayment of home loan from the joint account.

You should also note that deduction u/s 80C is allowed on payment basis. So if you paid principal amount more than your wife , both can not claim the deduction same. You will get the deduction in proportion of payment and your wife will get deduction in proportion of her payment.