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My wife and I had jointly purchased a flat. Can I claim the entire home loan EMI for tax benefit?

You will be eligible for tax benefit only in the proportion of your ownership of the flat.

ET CONTRIBUTORS|
Apr 27, 2019, 12.18 PM IST
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Payment of housing loan EMI provides two tax benefits: deduction for interest payments and deduction for principal repayment.
My wife and I had jointly purchased a flat. Until recently, both of us were paying the EMIs together and claiming tax benefits in equal proportion. Now, my wife is no longer working and I alone am paying the EMIs. Can I claim the entire tax benefit?
Amit Maheshwari, Partner, Ashok Maheshwary and Associates
replies: No, you won't be able to claim tax deduction for the entire amount. As you are the partial owner of the flat, despite bearing the entire EMI burden now, you would be eligible for tax benefit only in the proportion of your ownership of the flat.

My husband and I have invested in a property. We took a joint home loan to purchase it. I have been paying the home loan EMIs from my account. Will both of us be eligible for tax benefits?
Rakesh Bhargava Director, Taxmann
replies: Payment of housing loan EMI provides two tax benefits: deduction for interest is allowed under Section 24(b) and deduction for principal repayment is allowed under Section 80C. Both these deduction are allowed, if EMI is paid by the assessee. As EMI has been paid by you, the deduction will not be available to your husband. The extent of the deduction will be based on your share in the property.

Also Read: 4 important tax benefits of buying a house jointly

I sold my flat in January 2019 for Rs 37 lakh and made LTCG of Rs 17 lakh. I booked an under construction flat in 2015 and am yet to pay the final instalment of Rs 8 lakh. It is due in August 2019 at the time of possession. The cost of the new flat is Rs 93 lakh. Will I get tax exemption on LTCG from the flat I sold?
Ashok Shah Partner, N.A. Shah Associates
replies: To claim exemption of LTCG under Section 54 of the Income-Tax Act, the new house should be purchased within a year before or two years after the sale of a property, or it should be constructed within three years from the date of sale. As you have booked an under-construction flat, based on various precedents, it can be said that the builder is constructing the new flat for you. So, you can claim exemption on LTCG tax of Rs 17 lakh, as the cost of construction of the new flat is higher than your capital gain.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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