Loan benefits

Tax Benefits for Home Loans: What will the tax benefit be if I took out two home loans for two separate properties?

I have an existing mortgage for a property in Mumbai, of which my wife and I are co-borrowers. I took out a loan of Rs 1 crore in 2016, of which Rs 30 lakh is unpaid. Now I have to leave Mumbai. I’m planning to buy a new home in the city I’m moving to and need a home loan. If we buy this new home (jointly owned by me and my wife), how will the tax benefit be?

Amit Maheshwari, Partner, AKM Global responds: If you intend to claim the two properties as independent, the benefit of the interest deduction is limited to Rs 2 lakh each for the co-owners per year. This limit should be the global limit for all independent properties. However, when leasing property, there is no upper limit for claiming interest. However, losses that might arise due to such interest can be deducted from other income up to Rs 2 lakh only and the balance must be carried forward. You can also claim a deduction for the main part of the loan or stamp duty paid in the year under section 80C up to a maximum of Rs 1.5 lakh for each co-owner. The tax advantages in the event of co-ownership are available to all co-owners in the property report.

If my son gives Rs 4 lakh to my wife, is she required to pay tax on it? If she invests this money in an FD bank, will the interest received be added to my son’s taxable income?

Shubham Agrawal Senior Tax Advisor, responds: The Income Tax Act gives a list of parents from whom you can receive gifts without tax consequences. His is included in this listing. Therefore, there will be no tax on this transaction. The provisions relating to clubbing do not apply to gifts given to parents. Thus, interest earned on this amount will be taxable in your wife’s name.