Your Wife’s Claim is Correct!
January 6, 2007 by taxworry · Leave a Comment
My wife is a central government servant in New Delhi. We used to live in rented house, and from March 2006 shifted to government accommodation allotted to her. In 2005 she purchased a flat in Ghaziabad taking bank loan, and from May 2006 we gave it on rent. During 2005-06 her employer allowed her to avail deduction on interest paid against the loan. But this time the Pay & Accounts refused to take loan re-payment certificate issued by the bank. She is a hospital employee doing all shift duties. It is not possible to stay in her own accommodation and do her duties. As she is paying a big amount as loan repayment, it is also not possible to invest for tax saving. Please advise whether she is entitled for discount on loan repayment in the given case, and if yes what should she do. peter@infobase.in
Do you show rental income as house property income in your wife’s return which you must , I presume. The Pay and accounts officer is not doing the right thing by not allowing interest , because legally your wife is supposed to get the deduction of principal and interest amount.
Even if , the house was not rented, your wife was entitled to deduction of interest and Principal amount if the house is vacant owing to employment . Section 23 , given below , is clear
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“Section23(2) Where the property consists of a house or part of a house which—
(a) is in the occupation of the owner for the purposes of his own residence; or
(b) cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him” .
I presume that pay and accounts officer must me objecting on ground of rental receipt.Write to the pay and accounts officer quoting the aforesaid section . If your wife show the rental income and still the officer hell bent in not allowing the dedcution, you can claim the refund of excess TDS in your wife’s tax return. You can also write to his superior .
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