Can my wife add unclaimed home loan interest to acquisition cost?

As per the limited facts provided, it seems that the house is in your spouse's name; however, you are co-borrower in the home loan and the loan has been fully repaid by you.

- Parizad Sirwalla

At the outset, please note that as per the clubbing provisions in the tax laws, income which arises to the spouse, from property transferred directly/indirectly to the spouse, otherwise than for adequate consideration, should be added to the total income of the transferor spouse. Hence, there is a view that if the house is jointly funded, capital gains from sale of such a house should be included in the income of the respective spouses, in the ratio of their respective funding towards the cost of acquisition.