My father had availed a loan of Rs 4.5 lakh from a bank in 2004 with my mother as co-applicant. In 2010, my father died. The onus of repaying the loan is with my mother. She is dependent on me and I am paying the EMI of Rs 5,640 a month.

Can I claim tax benefit on this loan amount? Can't my mother ask for a waiver of the pending loan as she is a homemaker and is not earning? The rate of interest is 15 per cent. Should I approach another bank for refinancing and try for a better deal?

— Pandey

To claim deduction on repayment of housing loan, income from house property should be chargeable to tax in the hands of the individual and loan should be repaid by the individual as a borrower. You would not be eligible for the deduction. You would be able to claim the tax benefit on housing loan repayment if you own or co-own the property and also become borrower or co-borrower of the loan and satisfy other conditions. For loan waiver, please refer the of the agreement.

I have a housing loan of Rs 5 lakh. The house is held jointly with my wife. If I pay an instalment from HUF, can I get deduction U/s 80c? Can I show the amount paid from HUF as a loan and claim or deduction U/s 80c?

— Suresh Joshi

For claiming such a deduction, income from house property should be chargeable to tax in the hands of the individual as an owner and loan should be repaid by the individual as a borrower of loan.

Accordingly, as the income from such property is not chargeable to tax in the hands of the HUF and the HUF has not borrowed the loan, there will be no eligibility to claim deduction. Even if you show amount paid by HUF as a loan to you and HUF repays loan to the bank, the situation would be the same. Only when you being the borrower of loan make repayment, would you be eligible for deduction under section 80C.

My daughter and son-in-law are now NRIs. They own a flat in Coimbatore. I hold a general power of attorney in respect of the flat. I intend to rent out the flat for Rs 2 lakh annually. They have no other income. Is it compulsory to deduct tax at source from rent? Can I get exemption as there is no tax liability under Sec 195? Is there an NRI cell dealing with such cases? As my daughter and son-in-law left India in 2000 they do not have any details of their PAN numbers.

— T.V. Ranganathan

As your daughter and son-in-law are non-residents in India, the person responsible to make such rental payments to them would be required to deduct tax at source while making the payment. If the tax deducted at source exceeds tax payable, they can claim refund. However, your daughter and son-in-law can obtain a certificate for NIL or lower rate of withholding tax by following the steps prescribed under the Act. In such case, the rental payments may be received without deduction. . However, please note that PAN is a pre-requisite for obtaining such certificate.

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