My friend has built a house wherein the house property is in the name of his wife (house wife).
He has taken housing loan from bank for which he is co-obligant (first obligant - wife and second obligant himself.) He is getting I.T. exemption for the last 3 years, but his employer is objecting to show the proof where such rule is existing. Please clarify the rule position. Since his wife has no other income being house wife and the responsibility lies with him to repay the housing loan, he is getting the I.T. exemption. Please clarify.
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The assessee should be the owner of the property for claiming deduction. Please check in whose name the properti is. If your friend is owner or benamidar of the property, he can claim deduction u/s 24 for the interest payable on the loan taken and deduction u/s 80C for the installments paid. These rules are given under section 22 Section 23, and Section 24 of the Income Tax Act
mentioning u in place of ur friend...
Yes , ur employer is right that u can not get deduction. u can find some words related to this in 80C. and further u can do tax planning by doing one thing...
make adjustment in ur books so that it looks like that u have gifted money to ur wife for purchasing the house.. by doing this, it will be clubbed in the income of ur income u/s 64 of income tax.. nw u can easily claim deduction u/s 80C for principal component repaying the loan whether it is in ur name or ur wife name. and sec 24 for the interest component