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I booked a builder’s flat in my name in 2009. The pay­ment was con­struc­tion-linked and I am yet to get the pos­ses­sion. In 2012, we had to take a home loan to pay the re­main­ing 25% amount. The loan was taken by my son, who is work­ing. He is the main ap­pli­cant and I am the co-ap­pli­cant. He is re­pay­ing the loan through EMIs w.e.f. June 2012. Can he claim tax ben­e­fit un­der sec­tion 24(c) or any other sec­tion? Am I en­ti­tled to claim ben­e­fit, though I am not work­ing at present?

—GK A bor­rower can get tax de­duc­tion ben­e­fit on home loan for un­der- con­struc­tion prop­erty only from the fi­nan­cial year in which the con­struc­tion is com­pleted, ir­re­spec­tive of whether it is pre-EMI or EMI on part pay­ment. The in­ter­est paid dur­ing con­struc­tion pe­riod will be al­lowed in five equal in­stall­ments be­gin­ning from the year in which the con­struc­tion is com­pleted and till pos­ses­sion. Any pay­ment of prin­ci­pal dur­ing the year in which the prop­erty re­mains un­der- con­struc­tion is lost for­ever.

As far as your son avail­ing tax ex­emp­tion is con­cerned, your son can­not claim any tax ben­e­fit as he is not the co-owner to the prop­erty. If you are also ser­vic­ing the loan, you can claim tax ben­e­fits to the ex­tent of your share in the loan. How­ever, you will not be ben­e­fited un­less you have tax­able in­come. What is the po­si­tion re­gard­ing TDS de­duc­tion in case of joint pur­chasers of an im­mov­able prop­erty of more than R50 lakh? Do we need to pay for power backup, club mem­ber­ship and in­ter­est free main­te­nance ser­vice charge to the builder and will that be added to the cost of the prop­erty for which TDS is to be de­ducted?

— Rahul If the over­all “con­sid­er­a­tion for trans­fer of im­mov­able prop­erty” ex­ceeds R50 lakh, then your TDS will be de­ducted ir­re­spec­tive of the num­ber of joint pur­chasers.

All joint pur­chasers are re­quired to get tax de­ducted sep­a­rately on the amount of pay­ment that per­tains to them. This means that you will need to de­cide who owns what share in the prop­erty and the mode of pay­ment of each per­son. Make this pay­ment sep­a­rately as it will also help while claim­ing de­duc­tion of the in­ter­est on home loan.

As far as club mem­ber­ship charge and in­ter­est free main­te­nance ser­vice charge is con­cerned, it can be ar­gued that this is part of the “con­sid­er­a­tion for trans­fer of im­mov­able prop­erty” (es­pe­cially since they are in­cluded in the agree­ment). I would sug­gest you not to take a risk and deduct the tax. Af­ter all, the builder has to give you credit for the TDS and this is not an ad­di­tional ex­pense. My home loan was sanc­tioned from one bank on Septem­ber 2012 but till now I have not given any re­quest for dis­burse­ment. Re­cently, I have ap­plied for home loan from an­other bank and it got sanc­tioned. Now I have asked the first bank to can­cel the first home loan and re­fund the pro­cess­ing fee af­ter de­duct­ing the stan­dard charges. That bank, how­ever, is telling me that the pro­cess­ing fee amount can­not be re­funded. I want to know that if there is any pro­vi­sion for re­fund of pro­cess­ing fee from the bank af­ter de­duct­ing some stan­dard charges.

—S Biswas Pro­cess­ing fee is charged to get the loan ap­pli­ca­tion pro­cessed and is to­wards the cost of pro­cess­ing your loan ap­pli­ca­tion. This fee is non­re­fund­able in most cases. If you ex­am­ine the loan ap­pli­ca­tion form, you will most prob­a­bly find a line in bold print that says that the pro­cess­ing fee is non-re­fund­able.

So get­ting a re­fund of pro­cess­ing fee from your bank (The one you men­tioned does not give home loans) seems very un­likely in your case.

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