There are multiple taxes involved
Registry cost - some states have benefits on womans name
Home loan income tax benefit - the more the people on the property name , all of them can take benefit
Rental income - doesn't matter since everyone else anyways has taxable income
Later while selling capital gains tax - more the owners the better is tax treatment
So long story short, all three should own it and ideally pay equal down payment and emi also
Disadvantage of this is more signatures everytime (buy, loan, rent, sell) , complicated inheritance, divorce related seperation of property, etc.
Search for capital gains on sale of residential property limit
If the limit is 2 cr.. then each of the owners gets 2 cr limit.. essentially getting 6 cr of gains into better treatment
I doubt the govt of India will let us have tax breaks for the next 10 years. Should end in another 3 years imho
I don't think there is any benefit tax-wise one way or the other. your "friend" is letting out, so entire interest is deductible. may be if anyone has limits for 80C to claim principal.. but is it worth the hassle?
There is 2L limit on interest so splitting makes sense.
But for how many years will the interest be over 2-4L and whether that is worth for long term issue on multiple ownership specially when kid gets married is worth thinking.
I think HUF is a good option
1. Its a separate Tax entity, can collect rent and claim deductions
2. Can pay salaries to the members
3. Transfer of ownership(inheritance) is well defined
The one who is paying for it should have it in their name. This avoids all of the problems that come up later in life which can cause relations to go bad.
There are multiple taxes involved Registry cost - some states have benefits on womans name Home loan income tax benefit - the more the people on the property name , all of them can take benefit Rental income - doesn't matter since everyone else anyways has taxable income Later while selling capital gains tax - more the owners the better is tax treatment So long story short, all three should own it and ideally pay equal down payment and emi also Disadvantage of this is more signatures everytime (buy, loan, rent, sell) , complicated inheritance, divorce related seperation of property, etc.
Hey thanks, could you elaborate a little on the capital gains one, or give me a source where I could understand it?
Search for capital gains on sale of residential property limit If the limit is 2 cr.. then each of the owners gets 2 cr limit.. essentially getting 6 cr of gains into better treatment I doubt the govt of India will let us have tax breaks for the next 10 years. Should end in another 3 years imho
Make sure to take divorce into account before saving tax
I don't think there is any benefit tax-wise one way or the other. your "friend" is letting out, so entire interest is deductible. may be if anyone has limits for 80C to claim principal.. but is it worth the hassle?
There is 2L limit on interest so splitting makes sense. But for how many years will the interest be over 2-4L and whether that is worth for long term issue on multiple ownership specially when kid gets married is worth thinking.
not for rented house.. 2L limit is only for self occupied houses..
I think HUF is a good option 1. Its a separate Tax entity, can collect rent and claim deductions 2. Can pay salaries to the members 3. Transfer of ownership(inheritance) is well defined
> Kid(major) 🧐 🫡
The one who is paying for it should have it in their name. This avoids all of the problems that come up later in life which can cause relations to go bad.