House loan income tax exemption for house under mother's name

Hello taxpayer,

Going by the facts of your case, I understand that you and your father are joint owners along with your mother, of a plot of land which is being financed by a bank loan.

From income tax perspective, you can't avail any exemption either in respect of interest or principal repayments, as the legal provisions in this regard are specifically for housing loan and not plot loan as such.

However once you construct a house on this plot within specified time frame, then you can start availing tax benefits from the year construction is completed. 

In case, its a dedicated housing loan, then the Co-borrowers can avail tax benefits, starting form the year construction is completed, in the proportion they have availed the loan. 

Hope it answers your query. Feel free to reach out through telephonic consultation for detailed discussion. 

Best Regards, 

1. No as you are not a legal owner of the property.

2. By becoming a co-owner in the property

3. How you can create a will when property is not in your name?

For detailed discussion, please take telephonic consultation

Hi

Exemption under income tax act is applicable on home loan not loan for plot first as per my understanding you need start construction on it & you need become co owner of property then only you can claim exemption.

For details discussion please have a phone consultation.

To ensure that the tax benefits of home loan can be availed by all three co-borrowers its necessary that they all are also the owners of property. You have mentioned that the registry for the plot hasn't been done yet which means you can still get the joint ownership done. 

Second, you can avail the exemption only when the construction is done for repayments done after that. Having said that, you can also claim exemption for interest paid during pre construction phase within the overall limit prescribed by the law. 

For detailed discussion, would advice you to take a phone consultation. 

Best Regards, 

This is very litigative. Since, you are not the owner of the property, tax department may not allow any claim in your name. If you want to play safe, property should be in your name.

Further, till the time construction is not completed, you dont get any benefit of interest on loan. You will start getting benefit once construction is completed

Co Borrowers can claim deduction in the proportion of there borrowing. The deduction for interest will be available after the construction is completed as pre construction ;period interest.

Ans. 1 - No tax exemption benefit even EMI is being paid by you, as property is not registered in your name. however the EMI paid can be treated as loan to your mother and can be taken back at later stage or you can treat i as gift to mother.

Ans 2. If your Mom wants to transfer the property in your name at later stage, stamp duty to be payble on transfer as per your location (state).

Ans 3. No, You can't claim any tax benefit even property allotted to you in her will. Will comes in power one such person got deceased, and will can be changed at any point of time.

My suggestion to save taxes to add your name  in the property (consult any lawyer) before taking loan and claim tax benefit. 

Thanks for the question.

If you are the owner of the property, then you cannot claim the benefit of EMI.

Once you become the owner/ co owner, you can avail deduction benefits.

Construction doesnt matter. the benefit of deduction becomes available only after the construction is over. However, please ensure to complete the construction within 5 years of loan otherwise the deduction would be very limited.

Feel free for any clarification.