I’m an Indian citizen and I’ve an elder brother who works in Switzerland. Both of us are in our early 30s and don’t have any mortgage in opposition to our names. We need to buy a flat in New Delhi or Ahmedabad and have to avail a house mortgage for the aim. This would be the first asset within the identify of both of us or collectively. Can my brother and I avail of a joint mortgage? How will the tax reduction based mostly on residence mortgage EMI be calculated and the way will it apply on this case? Is it advisable to avail of a joint mortgage or ought to or not it’s completed within the identify of one in all us?
—Name withheld on request
Subject to banks’ eligibility standards, your brother and you could apply for a joint residence mortgage. However, in case of joint residence mortgage, most banks insist on joint possession of property.
As the property is more likely to be co-owned by your brother and your self in equal share, the taxability of the revenue from the property may even be equally divided. In case the property is on your personal residence or will not be occupied as your brother and you’re employed elsewhere, your brother/you could declare deduction for curiosity on housing mortgage as much as ₹2 lakh per monetary yr as loss from home property. The deduction might be out there to the person who has paid the EMIs. If your brother and you’ve got each contributed in direction of the EMIs, then the deduction might be pro-rated within the ratio of contribution topic to the ceiling of ₹2 lakh per particular person.
Further, in respect of the principal of mortgage obtained from an Indian financial institution, your brother/you possibly can declare deduction of compensation on instalment foundation, stamp obligation, registration price and different eligible bills for buying a home topic to the general restrict of ₹1.5 lakh for every monetary yr. But such deduction is offered provided that your brother/you’ve taxable revenue in India (apart from specified incomes resembling long-term capital good points).
Further, relying on the banks’ personal eligibility standards, price of property and your means to repay, you could apply for residence mortgage collectively or singly.
Sonu Iyer is tax companion and folks advisory companies chief, EY India.
Subscribe to Mint Newsletters * Enter a legitimate e-mail * Thank you for subscribing to our publication.
Never miss a narrative! Stay linked and knowledgeable with Mint.
Download
our App Now!!