Ask Mint | Co-owners get tax break in joint loan

Ask Mint | Co-owners get tax break in joint loan
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First Published: Wed, Feb 17 2010. 09 18 PM IST

Updated: Wed, Feb 17 2010. 09 18 PM IST
I am a non-resident Indian and have given around Rs15 lakh to my father. Would there be a gift tax implication for me?
—Parthiv Sharma
Gift tax has been abolished with effect from 1 October 1998 and, thus, there is no gift tax liability on you. Taxability of gift is now covered under section 56 of the Income-tax Act. If the recipient gets in excess of Rs50,000, he has to include it in his income. However, the gifts received from relatives are not covered under this section. So, there are no tax implications for you.
Can I redeem my fixed deposit (FD) before the original term?
—Radheshyam Pandit
Yes, FDs can be closed before their original term ends. If the FD is closed before completing the original term of the deposit, the interest will be paid for the period the deposit has remained with the bank. The interest rate would be that applicable on the date of deposit. Some banks may also charge a penalty as prescribed by the bank on the date of deposit.
I want to take a home loan in my name but I want to include my mother as a co-owner. My mother is involved in our family business and will make a contribution to the deposit. Can I solely claim tax benefits on the loan and interest?
—Suresh Kumar
You alone can claim 100% tax deduction on a joint home loan provided your mother and you enter into a share agreement, indicating your shares in the property as well as your 100% share in the loan. Since you alone will repay the loan, you will be able to claim 100% tax deduction benefits.
If three working individuals (mother, father and son) are co-owners of a property and all three take a joint home loan, then will all of them be entitled to claim tax exemption?
—Sandeep
Yes, all three can claim income-tax benefits in individual tax returns in proportion to the share in the loan.
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First Published: Wed, Feb 17 2010. 09 18 PM IST
More Topics: Tax | Loan | Fixed Deposit | Investment | Money Matters |