I purchased a site with a bank loan. I will be retiring this year by which time the loan also gets repaid. The bank is prepared to lend to me for a house construction also, but I do not want to avail this loan as I am not sure of repayment. My son is employed and is otherwise entitled to borrow. He will be the ultimate owner of the house I intend to build. Can my son avail tax benefits on the housing loan borrowed and EMIs remitted since the site is in my name? If not, please suggest a suitable deed by which he will be able to avail the tax benefits and also automatically succeed to the property after my lifetime. He is my only son, daughter married already.
You need to first gift transfer the site to your major son (even half undivided portion would suffice). Then he could construct the residential house thereon with a bank loan. The interest paid towards the bank loan in such a case would be entitled to a deduction out of your son's income. Also, the loan repayment would be deductible under Section 80C (subject to limits).
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Tax benefits on the housing loan borrowed and EMIs >> 
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Tax benefits on the housing loan borrowed and EMIs
by cherry » January 8th, 2010, 12:56 am
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