Regarding home loan co-borrower to co-owner process

Hi, I have a home loan as co-borrower on my father property and he is not able to pay home loan so I have to pay all loan installment. I am not co-owner so I am not getting any tax benefit. My father is ready to make me co-owner of property by 50% only for tax redeemntion. So what is the process so I can avail tax benefit.
Just minimum documentation required to avail I don't want to be purposely owner just want to avail benefit. Please minimum  documents for it.
Thanks
Asked 6 months ago in Income Tax from Jaipur, Rajasthan
Dear Sir,

As it is clear from your query that you are not able to take benefit of interest paid on Home loan which was taken by your Father as you are not an owner of the property.

You can not claim deduction of interest on home loan as you were not a co-borrower at the time when loan was taken. So you wouldn't able to take benefit of interest even when transfer is made by your father to you.

However, There is a way out where you can transfer  amount (principal+ Interest) in your father's account and he would make payment to bank then your father would become eligible for taking  deduction of interest.
This way you wont have to go through the process of transfer of property. Thus, would be convenient and beneficial for you.

In case of any clarification feel free to contact.

Thanks and Regards 



Shiv Kumar Agarwal
CA, Delhi
195 Answers
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Dear Sir,

If your primary intention is to have a minimum documentation and not the tax benefits, you better transfer the amount to your father for paying the loan installments and let the installments get deducted from his bank account. He will be eligible to get tax benefits. 

Further, even if your father transfer the part of house property to you, you will not be able to take tax benefits because the loan taken for the purpose of BUYING/CONSTRUCTING a property will accompany the tax benefits. In this case you will not be buying the house property.

Please feel free to revert, in case you require any additional clarification on the above.

Thanks and Regards,
CA Abhishek Dugar
caabhishekdugar@gmail.com 
Abhishek Dugar
CA, Mumbai
755 Answers
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You can pay rent to your father and claim HRA.

Thanks and Regards,
CA Abhishek Dugar
caabhishekdugar@gmail.com
Abhishek Dugar
CA, Mumbai
755 Answers
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Dear Sir,

I am sorry. I cant think of any planning possibility in the current situation.
Abhishek Dugar
CA, Mumbai
755 Answers
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There is one possibility but that would be too cumbersome. That will require your father selling the property to you and the bank will transfer the loan in your name.

But it may lead to capital gain taxes plus payment of registration fee and stamp duty
Abhishek Dugar
CA, Mumbai
755 Answers
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Hello Sir,

As explained by you since you are not the owner of the property you are no way entitled to claim the benefit of the housing loan installments paid by you.

Trust this clarifies your query. 

Feel free to get back/ call back for any further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
706 Answers
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The same is already being answered by our fellow CA. for more answers mail at modani005@gmail.com
Shyam Sunder Modani
CA, Hyderabad
953 Answers
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Dear Sir,

The only option available to you is to get the property transferred in your name and then take a new housing loan and claim the benefits. But this transaction will involve Capital Gain Tax and also registration Fee to be payable which again is an unnecessary  cost.

Trust this clarifies your query. 

Feel free to get back/ call back for any further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
706 Answers
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You can show the amount paid to your father till now as your own contribution. Approach bank, takeover full property at Stamp value rate and loan also. Stamp duty in case of transfer to blood relations is less in some states. Check the position in your state.If property is not very old, there may not be much capital gain to your father. . Bank will be more than happy to do the process as you are possibly earning more than your father. . You may or may not keep second joint holder name of your father.

Alternatively, you may buy only 50% to 90% share from your father. For buying this share bank will add your name as co-borrower. It does not make any difference whether your name is first or second.
Sagar Jayawant
CA, Thane
27 Answers
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