Individuals paying for residential houses will get complete tax benefits

The Income-tax Appellate Tribunal (Mumbai bench) has given a landmark judgement, saying that if an individual does the entire investment for purchase of a new residential house, along with stamp duty and registration charges, (s)he will be entitled to the full benefit of the relevant Income-tax (I-T) exemptions.

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This means that adding the name of a close relative to the newly purchased property as joint owner would not result in dilution of the I-T exemption.

"The ITAT has upheld the well-established criteria that ownership for I-T purposes is determinant upon who has made the payment and to what extent. Very often, the name of a non-earning spouse, or parent or even sibling is added when a new property is purchased to offer a security net to them. In those cases, where they have not contributed towards the purchase, the I-T benefit, such as on re-investment should flow entirely to the buyer who had made the purchase. This aspect has been reiterated by the ITAT," Gautam Nayak, tax partner, CNK & Associates told TNN.

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