Go Back   Team-BHP > Around the Corner > Shifting gears


Reply
 
Thread Tools Search this Thread
Old 9th May 2011, 14:42   #196
BHPian
 
Join Date: Nov 2010
Location: Bangalore
Posts: 59
Thanked: 4 Times
Default re: Income Tax savings, Investments and Insurance

Quote:
Please let me know if I can avail 3L interest rebate (combined) and share the govt links on the same so that I can talk to my company finance guys.
Hi Neoonwheels, even I had similar question earlier and banged many doors to know the answer. What I learnt is: You (and your wife) cannot take an exemption of more than 1.5 Lacs out of one one property. It needs to be total of 1.5 Lacs as you mentioned above. However if you invest in the second property and the repayment of the first property is still going on, then you and your wife can together get the exemption of tax on the total amount of interest paid (even if it is more than 1.5 Lacs per annum).
But the same is NOT applicable for the third property onwrds! :(
musafir_blr is offline   Reply With Quote
Old 9th May 2011, 14:48   #197
Senior - BHPian
 
ghodlur's Avatar
 
Join Date: Sep 2009
Location: Thane
Posts: 5,011
Thanked: 2,020 Times
Smile re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by neoonwheels View Post
Guys,

My wife and I, have taken a home loan. We have the flat registered in our names. I would like to ask, can we BOTH, take the reabte of 1.5L interest paid on home loan per annum? The interest component would be close to 3L.

My company says for joint loans, I can avail max 75K benefit, if my wife is also claiming it. So overall we can avail max 1.5L benefit on interest paid.

Please let me know if I can avail 3L interest rebate (combined) and share the govt links on the same so that I can talk to my company finance guys.
In no way can you claim the Interest rebate for more than 1.5L single or combined. If both of you need to claim the interest rebate then there is a deed required which will show the EMI repayment. I dont have detailed information on the same but I have heard my colleagues do this deed. Hope this helps.
ghodlur is offline   Reply With Quote
Old 9th May 2011, 14:53   #198
Senior - BHPian
 
neoonwheels's Avatar
 
Join Date: Aug 2005
Location: Pune
Posts: 1,648
Thanked: 597 Times
Default re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by ghodlur View Post
In no way can you claim the Interest rebate for more than 1.5L single or combined. If both of you need to claim the interest rebate then there is a deed required which will show the EMI repayment. I dont have detailed information on the same but I have heard my colleagues do this deed. Hope this helps.
Quote:
Originally Posted by musafir_blr View Post
Hi Neoonwheels, even I had similar question earlier and banged many doors to know the answer. What I learnt is: You (and your wife) cannot take an exemption of more than 1.5 Lacs out of one one property. It needs to be total of 1.5 Lacs as you mentioned above. However if you invest in the second property and the repayment of the first property is still going on, then you and your wife can together get the exemption of tax on the total amount of interest paid (even if it is more than 1.5 Lacs per annum).
But the same is NOT applicable for the third property onwrds! :(
Quote:
Originally Posted by vina View Post
Your company is telling you correct story. You two can avail 1.5L combined.
Thanks a lot guys. Can I ask my bank to give me a bank loan repayment statement which shows, she has paid 50K interest and I have paid 1L interest? The EMI goes from a joint account and the representative had said that we can adjust the ratio however we like.
neoonwheels is offline   Reply With Quote
Old 9th May 2011, 14:58   #199
Senior - BHPian
 
ghodlur's Avatar
 
Join Date: Sep 2009
Location: Thane
Posts: 5,011
Thanked: 2,020 Times
Smile re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by neoonwheels View Post
Thanks a lot guys. Can I ask my bank to give me a bank loan repayment statement which shows, she has paid 50K interest and I have paid 1L interest? The EMI goes from a joint account and the representative had said that we can adjust the ratio however we like.
Banks would not generally give two seperate provisional tax statements, it will give only one for the one account. That is where the deed comes into picture I guess where the division of EMI is mentioned. Talk to the bank and see if they can give two statements.
ghodlur is offline   Reply With Quote
Old 9th May 2011, 15:01   #200
Senior - BHPian
 
neoonwheels's Avatar
 
Join Date: Aug 2005
Location: Pune
Posts: 1,648
Thanked: 597 Times
Default re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by ghodlur View Post
Banks would not generally give two seperate provisional tax statements, it will give only one for the one account. That is where the deed comes into picture I guess where the division of EMI is mentioned. Talk to the bank and see if they can give two statements.
Could you please throw some light on the deed? How and where can I get it done? If bank gives me only one statement on the joint account then I guess as you said, I have to make a deed about the loan repayment structure between my wife and I.
neoonwheels is offline   Reply With Quote
Old 9th May 2011, 15:17   #201
Senior - BHPian
 
ghodlur's Avatar
 
Join Date: Sep 2009
Location: Thane
Posts: 5,011
Thanked: 2,020 Times
Smile re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by neoonwheels View Post
Could you please throw some light on the deed? How and where can I get it done? If bank gives me only one statement on the joint account then I guess as you said, I have to make a deed about the loan repayment structure between my wife and I.
I wished I could have helped you more on this one. As I said earlier I dont have all details. Better to ask the bank since I believe this EMI payments comes during the home loan saction where you would be providing the bank account debit details. Try googling also or see www.apnaloan.com or similar.
ghodlur is offline   Reply With Quote
Old 9th May 2011, 16:29   #202
Senior - BHPian
 
Join Date: Dec 2010
Location: Ghaziabad/Hyderabad/Mysore
Posts: 1,416
Thanked: 313 Times
Default re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by neoonwheels View Post
Could you please throw some light on the deed? How and where can I get it done? If bank gives me only one statement on the joint account then I guess as you said, I have to make a deed about the loan repayment structure between my wife and I.

What you can (actually could) do is something like this:

Split the rights of your property into two, between your wife and you - get two registration deeds, two loans (combined value same as your existing loan) two of everything - and then you can claim.

It is a lot of hassle, but can be done at the time of buying a property. Once you have bought though it it is a LOT more hassle.
vina is offline   Reply With Quote
Old 9th May 2011, 23:21   #203
BHPian
 
Join Date: Jan 2007
Location: Bangalore
Posts: 35
Thanked: 18 Times
Default re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by musafir_blr View Post
Hi Neoonwheels, even I had similar question earlier and banged many doors to know the answer. What I learnt is: You (and your wife) cannot take an exemption of more than 1.5 Lacs out of one one property.(
Quote:
Originally Posted by vina View Post
Your company is telling you correct story. You two can avail 1.5L combined.
Quote:
Originally Posted by neoonwheels View Post
Please let me know if I can avail 3L interest rebate (combined) and share the govt links on the same so that I can talk to my company finance guys.
Quote:
Originally Posted by ghodlur View Post
In no way can you claim the Interest rebate for more than 1.5L single or combined. If both of you need to claim the interest rebate then there is a deed required which will show the EMI repayment. .
For determining the amount of deduction - The deduction mentioned in the law is for an individual and not for a property. Each individual is coming together and purchasing a property. For commercial viability the property is purchased in Joint name. Each individual has invested either their own money or borrowed money. If the sale deed is silent about the share, the general presumption is 50:50.

If the total interest is exceeding Rs.3 L, each individual can avail benefit of Rs.1.5 L, it is not restricted to Rs.1.5 L only. Suppose interest is less than Rs.3 L, then 50% of this may be availed as deduction.

Pre-condition / caution

1. the sale deed should be in favour of all parties (For ex - husband and wife)
2. loan should be in Joint name.
3. If the EMI is being paid by a single account (husband or wife), as a precatuion the other person can trf 50% of such EMI to his / her account. this is not necessary but to be on safer side you may follow.
santhoshs is offline   Reply With Quote
Old 10th May 2011, 00:58   #204
Senior - BHPian
 
Join Date: Dec 2010
Location: Ghaziabad/Hyderabad/Mysore
Posts: 1,416
Thanked: 313 Times
Default re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by santhoshs View Post
For determining the amount of deduction - The deduction mentioned in the law is for an individual and not for a property. Each individual is coming together and purchasing a property. For commercial viability the property is purchased in Joint name. Each individual has invested either their own money or borrowed money. If the sale deed is silent about the share, the general presumption is 50:50.

If the total interest is exceeding Rs.3 L, each individual can avail benefit of Rs.1.5 L, it is not restricted to Rs.1.5 L only. Suppose interest is less than Rs.3 L, then 50% of this may be availed as deduction.

Pre-condition / caution

1. the sale deed should be in favour of all parties (For ex - husband and wife)
2. loan should be in Joint name.
3. If the EMI is being paid by a single account (husband or wife), as a precatuion the other person can trf 50% of such EMI to his / her account. this is not necessary but to be on safer side you may follow.

Are you a lawyer? If you are then you just saved me and my father a bunch. Thanks.
vina is offline   Reply With Quote
Old 10th May 2011, 06:45   #205
BHPian
 
Join Date: May 2004
Location: Chennai
Posts: 317
Thanked: 4 Times
Default re: Income Tax savings, Investments and Insurance

Will Bank FD's interest go up after the recent hike in base rate ?

My gut feeling is that since SB interest has gone up, Bank's will cut corners in the normal FD's !
bharanidharang is offline   Reply With Quote
Old 10th May 2011, 08:57   #206
Team-BHP Support
 
benbsb29's Avatar
 
Join Date: Nov 2006
Location: Brisbane
Posts: 8,012
Thanked: 3,455 Times
Default re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by santhoshs View Post
Pre-condition / caution

1. the sale deed should be in favour of all parties (For ex - husband and wife)
2. loan should be in Joint name.
3. If the EMI is being paid by a single account (husband or wife), as a precatuion the other person can trf 50% of such EMI to his / her account. this is not necessary but to be on safer side you may follow.
Both my wife as well as myself are claiming tax benefits on our home loan. All we had to do is give a signed declaration at both our respective offices about the ratio in which we would like the amount to be split for the claim. In our case, we have opted for 60:40, in favour of me.

As Santosh mentioned above, we have the sale deed as well as loan on both of our names, where my wife is the co-applicant. The EMI amount is deducted from my salary account so i do not think it is necessary to have this split to my wife's account as well.

Hope that helps.
benbsb29 is offline   Reply With Quote
Old 10th May 2011, 10:50   #207
Senior - BHPian
 
neoonwheels's Avatar
 
Join Date: Aug 2005
Location: Pune
Posts: 1,648
Thanked: 597 Times
Default re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by benbsb29 View Post
Both my wife as well as myself are claiming tax benefits on our home loan. All we had to do is give a signed declaration at both our respective offices about the ratio in which we would like the amount to be split for the claim. In our case, we have opted for 60:40, in favour of me.

As Santosh mentioned above, we have the sale deed as well as loan on both of our names, where my wife is the co-applicant. The EMI amount is deducted from my salary account so i do not think it is necessary to have this split to my wife's account as well.

Hope that helps.
Quote:
Originally Posted by santhoshs View Post
For determining the amount of deduction - The deduction mentioned in the law is for an individual and not for a property. Each individual is coming together and purchasing a property. For commercial viability the property is purchased in Joint name. Each individual has invested either their own money or borrowed money. If the sale deed is silent about the share, the general presumption is 50:50.

If the total interest is exceeding Rs.3 L, each individual can avail benefit of Rs.1.5 L, it is not restricted to Rs.1.5 L only. Suppose interest is less than Rs.3 L, then 50% of this may be availed as deduction.

Pre-condition / caution

1. the sale deed should be in favour of all parties (For ex - husband and wife)
2. loan should be in Joint name.
3. If the EMI is being paid by a single account (husband or wife), as a precatuion the other person can trf 50% of such EMI to his / her account. this is not necessary but to be on safer side you may follow.
So this means, my wife and I, can get the benefits worth 3L of interest repayment. I was confused since my finance dept guys said I can avail only 75K as my wife is co applicant. I was arguing with them on the term that the law says every individual can avail 1.5L as tax rebate.

Do you have any official source (Web links) which clearly says this so that I can forward the links to my company finance guys.
neoonwheels is offline   Reply With Quote
Old 10th May 2011, 11:02   #208
Team-BHP Support
 
benbsb29's Avatar
 
Join Date: Nov 2006
Location: Brisbane
Posts: 8,012
Thanked: 3,455 Times
Default re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by neoonwheels View Post
So this means, my wife and I, can get the benefits worth 3L of interest repayment. I was confused since my finance dept guys said I can avail only 75K as my wife is co applicant. I was arguing with them on the term that the law says every individual can avail 1.5L as tax rebate.
I am not sure if you understood it right. What i meant was that since i specified the ratio as 60% for me, and 40% for my wife, i can claim 1,12,500 while she can claim on the remaining from the 1.5 lakhs rebate. The cumulative from both the individuals should add up to the upper cap of the amount which can be claimed. This means your company's finance guys are right, provided you only seek to claim 50% against your name.
benbsb29 is offline   Reply With Quote
Old 10th May 2011, 11:56   #209
Senior - BHPian
 
neoonwheels's Avatar
 
Join Date: Aug 2005
Location: Pune
Posts: 1,648
Thanked: 597 Times
Default re: Income Tax savings, Investments and Insurance

Well this is really getting confusing now

I guess, I should consult a CA for this. What I dont understand is, the tax rebate is given to earning individuals and not property. So if the interest paid is 3L and if the property is a joint property, why cant we get the rebate as 1.5L for each individual property co-owners.
neoonwheels is offline   Reply With Quote
Old 10th May 2011, 12:40   #210
Senior - BHPian
 
ghodlur's Avatar
 
Join Date: Sep 2009
Location: Thane
Posts: 5,011
Thanked: 2,020 Times
Smile re: Income Tax savings, Investments and Insurance

Quote:
Originally Posted by santhoshs View Post
If the total interest is exceeding Rs.3 L, each individual can avail benefit of Rs.1.5 L, it is not restricted to Rs.1.5 L only. Suppose interest is less than Rs.3 L, then 50% of this may be availed as deduction.
I am sorry my friend but I beg to differ on this. The interest benefit is for single property and not on individuals. So the max interest rebate you can get is 1.5L no matter how many individuals are involved. If your argument was true then a single property would have many more applicants and everybody would be claiming the exemption which is absolutely not true.

Quote:
Originally Posted by neoonwheels View Post
I guess, I should consult a CA for this. What I dont understand is, the tax rebate is given to earning individuals and not property. So if the interest paid is 3L and if the property is a joint property, why cant we get the rebate as 1.5L for each individual property co-owners.
You can get a max rebate of 1.5L thats straight and simple. If your CA says that more than one person can claim the 1.5L rebate please let us know under what circumstances is this possible.
ghodlur is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
All Income Tax Queries (refunds, disputes, rates etc...) LLL Shifting gears 1290 15th November 2017 11:05
Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)! SILVERWOOD The Indian Car Scene 88 30th July 2017 12:39
Luxury cars outnumber tax-paying millionaires! Income tax evasion? Nav-i-gator Shifting gears 26 7th May 2016 09:35
Govt. to remove income tax exemptions and deductions. Please comment against it..... satish_appasani Shifting gears 15 15th May 2007 21:13
Road tax or income tax? SLK The Indian Car Scene 6 5th October 2004 14:52


All times are GMT +5.5. The time now is 07:33.

Copyright 2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks