Tax Query: Can co-owners of the same house claim tax benefits?

Mr Raj has recently bought a complete apartment jointly with his wife. He wants to know that if he and his wife will be able to claim the loan interest and principal repayment under section 80C and section 24 for the AY 2020-21. 

Since you and your wife have jointly purchased the apartment, it is assumed that you have jointly availed the housing loan too. The interest on housing loan paid and the principal repaid during the financial year can be claimed by the co-owners of the house property. The co-owners can claim the same in the ratio of the amount funded by each co-owner in the purchase of the house. 

So, in this case, Mr Raj and his wife are contributing towards repayment of housing loan, they both will be able to claim the deductions under section 80C and section 24 individually in the ratio of thier funding.

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Mr Kapoor took voluntary retirement from the public limited company in March 2005. A certain number of ESOPs were issued to him at a certain price. He has been holding such shares since then. He is confused about the tax implications if he sells them now. 

First of all, it is assumed that the equity shares mentioned in the query are listed on the stock exchange and no discount or benefits was offered to Mr Kapoor by the employer at the time of allotment of such shares. 

If the equity shares are held by an investor for more than 12 months from the date of allotment, the profit or gains arising from the sale of such shares will be considered as long-term capital gains (LTCG) and taxed accordingly.

From the 1st of April 2018 onwards, any LTCG earned from the sale of listed equity shares will be taxed at the rate of 10% provided the amount exceeds Rs 1 lakh in an FY. The acquisition cost for the purpose of LTCG’s calculation will be the highest listed price as on the 31st of January 2018 (instead of the actual sales value), given that the quoted price as on the said date is lower than the sale value. But, if the sale price is less than the listed price as on the 31st of January 2018, the sale value or actual cost price, whichever is higher, will be considered for the purpose of the computation of LTCG. The remaining LTCG will be taxed at the rate of 10% over and above Rs 1 lakh.

For any clarifications/feedback on the topic, please contact the writer at komal.chawla@cleartax.in