1

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.

1 Answer 1

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.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .