Income tax relief on existing home loans for NRI

Question

I have a rather (IMO) complicated situation, I'd like some clarification on a few points

(Note: all dates, names and numbers below are fictional, just made up to clarify the situation)

1. India, Sep/2015:

   • Salaried and working in India
   • I take a home mortage loan for 20L rupees, floating rate, payable over 120 months
   • I start the construction work on my house
   • 2 joint owners (one is me) and the loan is taken by both owners
   • Other owner has no income
   • My name is not the first name on the borrower list (this seems to matter for some reason)

2. India, Oct/2015

   • I start making EMI payments
   • Construction on going

3. India, Mid Apr/2016

   • I get and accept an offer from a US company
   • I relocate to the US after resigning from Indian company
   • I continue making EMI payments
   • Construction still on going on
   • I file IT returns for the monies earned during the financial year 2015-2016
   • I cant claim any benefit/relief on interest paid/principal amount (80C) as the construction work is still incomplete

4. US, Jun/2016

   • Construction still on going on, seems to take forever
   • I start remitting some money every month to my Indian bank account to keep the requisite funds to pay the EMI as well as keep the work going

5. US, Dec/2016

   • After multiple unavoidables delays, construction still on going on
   • I am still remitting money to India

6. India, Jan/2017

   • Construction almost done, expected to completed by Feb/2017
   • No or very little salary/income from interest on deposits
   • TDS already deducted throughout the year
   • Net income in India < exemption limit according to IT slabs

Some additional notes

• I will be filing my IT returns every year irrespective of income
• It is my understanding that the IT relief on interest paid can be claimed over a period of 5 years in equal installments (20% each year) AFTER the completion of the house but NOT before that.
• As my total income in India is already in the lowest tax bracket (0%) it automatically means I can get a complete refund of all the TDS and income tax.

So my questions are:

1. Can I claim a 20% of the interest paid over the period of Oct/2015 through Mar/2017 (18 months) when I file for IT returns this year in Mar/2017?

2. Does my name not being the first name affect my eligibility of claiming the relief?

3. Does that mean I my claiming the 20% relief on interest (and the remaining 80% over subsequent years) is in effect moot as my "taxable" income cannot go negative (meaning the govt cannot/will not return some money I have paid as IT in prior years)?

4. Does that mean as long as I continue to work in the US (already having become a NRI), have little or no income in India, I cannot claim any future relief regarding the principal or interest?

First post here, Please be considerate before hitting the down vote button if you feel the need to. Please leave a comment so that I can improve the question if possible.

Answer 1

Can I claim a 20% of the interest paid over the period of Oct/2015 through Mar/2017 (18 months) when I file for IT returns this year in Mar/2017?

Yes you can.

Does my name not being the first name affect my eligibility of claiming the relief?

No you can claim relief. Joint owners need to file a declaration on the quantum of relief claimed. Both can't claim 100%.

Does that mean I my claiming the 20% relief on interest (and the remaining 80% over subsequent years) is in effect moot as my "taxable" income cannot go negative (meaning the govt cannot/will not return some money I have paid as IT in prior years)?

If you have no other income on which tax is payable; then Yes it is irrelevant.

Does that mean as long as I continue to work in the US (already having become a NRI), have little or no income in India, I cannot claim any future relief regarding the principal or interest?

Yes that is right.