One of the most attractive benefits of taking a home loan is that they help you save tax, while you prepare to invest in a fixed asset. Acquiring a home loan makes you eligible for tax rebates under Section 80C and Section 24 of the Income tax regulations.
Highlights
- Tax benefits get divided among co-applicants in case of a joint loan
- The division takes place in the same proportion in which the asset is owned by each co-applicant
- Each co-applicant can claim a maximum tax rebate of up to Rs. 1.50 lakh (One Lakh up to AY 2014-15) for principal repayment and Rs. 2 lakh (1.50 Lakh up to AY 2014-15)) for interest payment.
- The very first condition is the house property has to be bought by the individuals jointly, and this should be in their joint names.
- The share of each holder should be clearly mentioned so that there is absolute clarity on the percentage ownership of each co-owner.
Tax benefits of Home Loan– Overall there are two types of tax benefits that are available on the repayment of a housing loan.
1. Interest paid on loan is eligible for a deduction up to Rs. 2 lakh per annum from the income of the individual under Sec 24 when the property is self-occupied or it is one ownership property lying vacant.
2. Repayment of Principal amount of Loan up to Rs. 1.50 lakh is eligible for deduction under Sec 80C.
The planning in the entire issue has to be done in such a manner that all the joint holders are able to take the tax benefit and no part of the total repayment goes waste.
Advantage for joint home loan takers–
Tax benefit
Joint holders can claim the maximum tax benefits individually. This means each holder can get a tax rebate of Rs. 1.50 lakh for principal repayment under Sec 80C and Rs. 2 lakh for interest payment under Sec 24.
The tax benefits are applied according to the proportion of the loan taken by everyone involved in the joint loan. For e.g. if the ratio of ownership is 70%:30% then the loan amount of 50 L will be split as 35 L and 15 L respectively and interest/principal applicable to the respective amounts will be taken into account for each individual taking the loan. For claiming your tax, it is best to procure a home sharing agreement, detailing the ownership proportion in a stamp paper, as legal proof for ownership.
To get the best out of the tax savings, it is good to let the partner with the higher pay make a higher contribution towards the home loan resulting in a better tax benefit collectively. In the case of an earning couple, this would make most sense as other expenses can be manged with the income of the person making a lesser share towards the loan. This would help you optimize the benefits from the tax exemption on principal and interest repaid.
Increased Loan Amount Eligibility
If more than one person takes a home loan then income of all the co-owners will be considered by the lenders. This can help increase the size of the loan. In this case, the bank combines the incomes of both the applicants, and thus, can sanction a proportionately higher loan amount. Buying a house jointly facilitates a larger loan as income of all the co-owners would be considered by the lenders.
Additional benefits:
- In many states, a lower property registration fee is levied in case the property is owned by women either individually or jointly.
- If husband and wife jointly own a property reduces the succession issues.
So taking a joint home loan has the significant twin benefit of increasing your loan eligibility and maximizing your tax rebate. There is one rule banks insist on when you apply for a joint home loan, which is that all co-owners of the property should also be co-applicants but the reverse need not be true.
Under Construction house- Another aspect that needs to be remembered is if you are buying a house under construction that you can claim tax benefits only after the construction of the house is completed.
Joint structure- The term ‘joint benefit’ in a housing loan refers to a situation where more than one person takes and repays a home loan. Here, the co-applicants are family members, which include husband and wife or father and son or father and daughter or mother and son or mother and daughter as the case may be. In such a situation, tax benefits have to be divided between all co-applicants and hence known as joint benefits.
Joint account – The repayment of a joint loan has to be made from a joint account owned by the co-applicants. Each of them needs to contribute his/her share to the account. But there are times when this is not possible and in case the payment is being made from just one person’s account then there has to be a method whereby the other individual is contributing his/her share. This will ensure that the benefits are also available in an adequate manner and that there are conditions that are being fulfilled in the process.
Disadvantage of a home loan in joint names
If you buy another house in future then as per Income Tax Act if a person has more than one house in his name, one of them will be treated as self-occupied, and another will be treated as let-out – even if it is not actually let out on rent. You would need to pay income tax on the rent received if this second house is actually rented out. But if it is not rented out, it is deemed as rented out, and you would have to pay income tax on an amount that you would have received as rent as per prevailing market rates.
When one should take Home Loan in Joint names:- Take the home loan in joint names
- If You need a higher loan amount then your eligibility in Individual capacity
- The income tax savings by opting for a joint loan is significantly higher than a single-name loan
When one should take Home Loan in Joint names –
- You have enough loan eligibility as single applicant
- The income tax savings by opting for a joint loan is not significantly higher than a single-name loan
- You plan to purchase another house in near future
Image courtesy of arztsamui at FreeDigitalPhotos.net
(Republished with Amendments)
Author Bio
We (myself, brother and mom) took a joint home loan of 18 lac with the period of 20 years. Mom is house wife. she is the owner of the house.Me and my brother are co-applicant in the loan. from starting he is not paying emi . i am only paying all emi. can i claim full interest under 80c. plz reply soon.also plx share any income tax paper document if possible
Sir,
myself is salaried and my wife is house wife . we borrow a property in the name of my wife can i take benefit it in my tax deduction.
Thank you – See more at: https://taxguru.in/income-tax/tax-benefits-home-loan-joint-names.html#sthash.rM5ZSeXB.dpuf
Sir,
myself and my wife are salaried. the land is registered in my wife’s name fully we have availed home loan with my wife as borrower and myself as co-borrower. but now i came to know of income tax rules that income tax rebate on home loan be claimed only by the individual on whose name the property is. as per this rule i cant claim at all hence i wish to change the proportion of 100% share of my wife to 80% in my name for incometax benefits and now the documents are with the bank. how can i get a share of the property as the documents are with bank. please help me on this so that i could save at least in the next financial year
Thank you – See more at: https://taxguru.in/income-tax/tax-benefits-home-loan-joint-names.html#sthash.rM5ZSeXB.dpuf
Dear Sir,
My father has constructing a house in my native place Jharkhand and he is retired person. We are short of fund to construct the house. I am taking a housing loan for the same in my fathers name and my name jointly. I will pay the EMI from my account. We are 2 brothers and sisters.
I am staying with my wife and kid in Mumbai in a rented apartment.
Can I claim the HRA and can I claim interest on borrowed capital for housing loan at native place?
Thank you.
Regards
Ravi
Sir,
myself and my wife are salaried. the land is registered in my wife’s name fully we have availed home loan with my wife as borrower and myself as co-borrower. but now i came to know of income tax rules that income tax rebate on home loan be claimed only by the individual on whose name the property is. as per this rule i cant claim at all hence i wish to change the proportion of 100% share of my wife to 80% in my name for incometax benefits and now the documents are with the bank. how can i get a share of the property as the documents are with bank. please help me on this so that i could save at least in the next financial year
Thank you
Myself and my wife are co-owners of a property and the ownership ratio is 50:50. If emi for the payment of home loan is solely paid by me can I claim all the income tax rebate – See more at: https://taxguru.in/income-tax/tax-benefits-home-loan-joint-names.html#sthash.zOgdBSDA.dpuf
Dear Sir
I have purchase a home at navimumbai in joint names of myself as well as in brother name what will future course of action when i want to remove his name from property (2017) as i have taken certain amount from him which will be paid to him by me also loan has been in both name due to higher eligibility please advice ?
Dear Sir,
I have taken a joint home loan with my father and brother for construction purpose. The plot document is on my father’s name and the home is also with my father’s name. The EMI of loan is shared by both of us. I would like to know can I take any tax benefit of Principal and interest.
Also, I stay in different city in a rented apartment but father continues to stay in the home, we have taken joint loan for. Can I avail HRA benefits along with this home loan tax benefits?
Hello Sir,
We (myself, brother and mom) took a joint home loan of 18+lac with the period of 20 years.
Mom is house wife. Me and my brother woring as good salaried engineers. Anyway Land is in my Mom’s name, so she should also a joint owner of this. me and my bro sharing this EMI amount for now. But the question is, Is it possible to releav my brother from this home loan, so that I can only the person to pay the future EMIs.
I’m in a good position to pay the monthly EMIs. My brother is planning to start a business with the help of bank loan. So he would be grateful if he get releav in this home loan. PLS SUGGEST ME..
Thanks in Advance..!
Myself and my wife are co-owners of a property and the ownership ratio is 25 :75. If emi for the payment of home loan is solely paid by me can I claim all the income tax rebate
Dear Sir,
I purchased a resale flat in Oct, 2014.Took home loan of 29.20 lakh from SBI jointly with my wife keeping her as first applicant for takeing the benefit of SBI her ghar. My wife is housewife. I am repaying the emi and only I wish to avail the income tax benefit since my wife has no income. is it possible or I have to share it with my wife? Pl guide me
Sir,
Me and my spouse had taken housing loan jointly
my spouse is not claiming any tax benifit for this loan
so i would like to take 100% tax benifit
but our finance department says that if a loan is on joint name only 50% + 50% benifit may be claimed
please guide me how to claim for 100% benifit
I want to take home loan on fathers property for making house on the first floor. He is retired. He is dependent on me. Am i eligble for the loan.If yes, what should be the share such that i enjoy the maximum tax benefit under what section. Please clarify.
I will be taking home loan jointly with my father. His income is lower than me. So, in that case, i will give him lower share in loan. So, how tax benefits would be calculated among each other. And how tax benefits would be calculated if he pays less amount than his share?
Hello Sir,
I have buyed property jointly with wife and me, my wife is housewife, she is first owner and I am second of property. I have paid stamp duty and registration charges, how can I avail tax benefit as on Registration challan/receipt my name and PAN number is not present, but my wife’s present
Dear Sir, I am a central government employee and I took a home loan along with my father for constructing a house on a land belongs to my father. In loan A/C my father is the first applicant and i am the second applicant. My father is not an employee and he is dependent on me and I am responsible for full EMI and have been paying since one year. can i claim for income tax rebate? Guide me… My office says that i am not eligible for tax rebate.plz send me under section which benefit me
I am 77 years old and wish to buy a flat worth 55 lakhs. The flat is in joint name with my nephew. If all the required terms for the loan is fulfilled by my nephew, can the ;oan be sanctioned?
My banker says that when a loan is passed against a single name, the flat also must be booked in that name only and no additional name can be added while booking the flat.
Dear sir I am paying housing loan issued on my mother name;then how can I show under IT benefit.my mother is a housewife and father jobless..please suggest
sir,
I want to purchase my fathers house for that i want to apply for housing loan.
please guide me which bank will give me housing loan to purchase my fathers house.
Thanks and Regards
Dear Sir,
My son, who is 22 years old but not yet employed. He is planning to apply for a flat from govt. agency. Can I pay the flat cost on his behalf, if allotted. Can I also take home loan for that purpose and get the IT benefit. Or it should be a joint applicant. Please guide me.
thanks
Hi,
i want to buy my father’s property by taking home loan. When I contacted some banks they are not ready to give loan.
They are saying i have to take mortatge loan.Please suggest me in this
Thanks in advance….
Rohit.
Sir,
My wife wants to constructs a house in Noida, since her age is 54+, she is not in a position to take HBA at this stage. She wants to put my retirement money in house constructing. Can She claim money taken from me as HBA and interest thereon for tax rebate under section 24(B).
Can you please clarify.
K D Dhingra
HI I am paying a home loan for the property which is in my father & mothers name and I am a co- applicant for the loan. Will I be eligible for income tax benefit? What needs to be done to make my self eligible for home loan since I am paying the entire home loan. Please advise
is tax benefit for housing loan interest applicaple to huf u/s 80c
and alsop in any other section
is tax benefit for housing loan interest applicaple to huf u/s 80c
Dear sir,
I m a govt employee working in Mumbai I have taken a home loan for construction of my parent’s house which is in the name of my mother only my mother is simply a house wife and doesn’t have any income
Emi is also paid by my salay only . Please clear can I avail the benefit of interest rebate under housing loan facility
I once again clear that my mother is Co applicant but no income i m main borrower but no owner
Me ,my son & my daughter in law are co owners for buying a house. I am the 1st owner as I have to reinvest the money I got thru sale of other property. Home loan is now raised for balance money by my son & di/l for buying the house . They are asking me to bear a portion of EMI as rental to them.Am I eligible for claiming HRA exemption in this case?
Hi there,
I have take housing lone for GICHFL fo the amount of 22 lack with co-applicant as my wife, ass she is also salaried & working in private company.
My question is that can i claim 100% in ITR on her name.
Hello Sir,
I have booked a flat. I am planning to take home loan. I and my wife are joint owners for the flat. My wife is not working now and will be joining work after 6 months as she is on a long leave. I have the following doubts:
1. If I apply for a home loan, is my wife also eligible for tax benefits after she joins work ?
2. Is she again eligible to apply for a home loan for the same flat after she joins work ?
3. What is the meaning of first and second applicant in the home loan forms and does this have any effect on tax benefits
4. Where should we mention the share of the flat owned by each other ?
Dear Sir,
I have taken a joint home loan with my father for construction purpose. The plot document is on my father’s name and the home is also with my father’s name. The EMI of loan is shared by both of us. I would like to know can I take any tax benefit of Principal and interest.
Also, I stay in different city in a rented apartment but father continues to stay in the home, we have taken joint loan for. Can I avail HRA benefits along with this home loan tax benefits?
Please advise.
I have purchased a plot in 2007 in my wife’s name. I have constructed a house in 2008 by availing housing loan in joint names from Nationalised Bank, I am applicant and my wife is co applicant. My wife is housewife and having no any income and I am paying EMI from my salary. I was availed benefit of both principal and interest for income tax calculation since last five years. And my present company has given benefit of principal portion only and not Interest portion. Please advice.
Dear Tax Guru,
I have taken a joint home loan with my father for construction purpose. The plot document is on my name but I am second Applicant in Housing loan and my father which is a pensioner, is first applicant in that loan. The 100% EMI of loan are being paid me. I would like to know can i take 100% tax benefit of Principal and interest.
Please advise.
Sir, the land document is my mothers name he has two sons i am working private mnc company can i apply housing loan the document in my mothers name
Hi,
I have applied for a Home loan to make house in a land in my hometown.But the property(land) is in my mother’s name who is an housewife.So i am only a co-borrower for the applied loan.But the loan has been granted entirely based on my salary income.So will i be eligible for tax exemption against the principal amount and the interest paid against EMI’s paid?.
Thanks.
I have a home loan since 2009 September and I want to sell the flat at same price or give gift to my brother/mother in march2014(within 5year). can my tax given previously be null and void and I have to pay all deductible income tax rebate under home loan.
2. if I purchase a second flat after selling first flat can I get tax rebate.
Regards
Rajesh
Dear Sir, I am a central government employee and I took a home loan along with my father for constructing a house on a land belongs to my father. In loan A/C my father is the first applicant and i am the second applicant. My father is not an employee and he is dependent on me and I am responsible for full EMI and have been paying since one year. can i claim for income tax rebate? Guide me… My office says that i am not eligible for tax rebate.
Dear Tax Guru,
I have taken a home lone for construction purpose. The plot is in the name of my elder brother and myself. I am second Applicant in Housing loan and my elder brother is first applicant in that loan. The 100% EMI of loan are being paid me. I would like to know can i take 100% tax benefit of Principal and interest.
Please advise.
husband and wife have took a first housing loan from HDFC and second housing loan from the nationalised bank for the same property. whether tax benefits be given for both loan?
Hello TaxGuru,
I have a land on my mom’s name who is a house wife, i would like to apply for home loan to construct a house. Could you please tell me on what circumstances i can avail tax benefits.
Thanks
-Kiran
Dear Tax Guru,
I have applied for a Home loan to make house .But the property(land) is in my wife’s name who is an housewife.So i am only a co-borrower for the applied loan.But the loan has been granted entirely based on my salary income.So will i be eligible for tax exemption against the principal amount and the interest paid against EMI’s paid?.
Please elaborate.
Thanks.
What is the benefit under IT rules if one of the spouse owns the plot (land) but Housing Loan for construction of a house thereon is taken jointly by them from a Bank. Can both the members can claim benefits under IT Act?
Dear All,
I have taken a join home loan with my mother. I’m paying all the EMIs and as my mother doesn’t need any tax benefit for the same hence I want to claim the 100% tax benefit on interest and principle paid. Could you please let me know how to deal with this.
Regards,
Nitash
Hello sir,
i have one confusion about when i am goverment employee in gujarat.
my account section has denied to accept joint certificate of two borrowers on tax reback certificate to owned house jointly,and HDFC home loan also on joint name.
HDFC home loan can not issued separate certificate for joint borrowers, what to do now sir help me!!
Dear Tax Guru,
I have taken a home lone for construction purpose. The plot is in the name of my mother. I am First Applicant in Housing loan and my mother is second applicant in that loan. The EMI of loan are being paid me. First, i would like to know can i take tax benefit of Principal and interest. if no, than can i take HRA deduction U/s 10(13A).
Please advise.
Hi,
I have applied for a Home loan to make house in a land in my hometown.But the property(land) is in my mother’s name who is an housewife.So i am only a co-borrower for the applied loan.But the loan has been granted entirely based on my salary income.So will i be eligible for tax exemption against the principal amount and the interest paid against EMI’s paid?.
Please elaborate.
Thanks.
sir, i as applicant with my papa and mom as co-applicant have taken a home loan from hdfc bank. But home is purchased and will be registered in my and my papa’s name. Will my papa and i be taken benifit in tax and in what protion? Papa working in psu and i in state govt.
A father buys a flat for his son on housing loan from the bank. For that loan he is a co-applicant and pay EMIs towards principal and interest exclusively from his own account/resources. Benefit u/s 80C and Section 24 should be enjoyed by him and not his non-earning student-son. How can his son make him owner for tax benefits.
Me and my brothers inherited a land from our father now we want To Sell It And Are Interested In Buying A House In Our Joint Names So Can We Claim Deduction Under 54 Seperately
Dear Sir,
I have home loan in joint name and home is also owned in joint name. EMI is paid by one owner at present. Can he claim tax benefit on interest alone i.e 1.5 lac limit.Please reply
Hello Sir, I am planning to buy a home in joint names (myself and my wife) however the loan will only be taken in my name since mywife doen’t have income. The home will be rented out to take advantage of HRA claim. Please clarify the following questions.
1. Can the income from the rented house can be considered as income of both of us (seprately) since the house is in joint name. 2. Can I claim the full loan Interest to take advantage of tax exemption on my income? In short, Would it possible to split the rental income in both of our names however the tax exemption will only be in myname since I have taken the full loan (I will add the rental income 50% to my annual income). Please clarify the questions. Thanks in advance.