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
Dear Sir,
I am in process of taking loan with my wife declared as the first applicant (as interest rate is lower if first applicant is a female) and me as the co-applicant.
However, only my salary has been considered while deciding loan eligibility and I only would be paying the EMIs.
So I just wanted to be sure that me not being the first applicant would not affect my tax relaxation?
i.e. I could still show (even when I am the co-applicant)
As my wife’s salary is not considered while deciding loan amount eligibility also only I am paying the EMIs so could I get the whole 100% of tax benefit in such case?
Please help its really urgent towards making a decision.
Thanks,
der sir
please tell me
housing+ loan per tax relief milegi ya nhi
my wife is also government employee me too
I have housing loan Rs 10.00 lacs
after one year mene bank se housing plus ke naam se loan liya
meri wife ko income tax me relief milegi ya nhi
please sir tell
Sir, I had purchased plot in the name of my wife. we have taken house building loan jointly with my wife. can we take income tax rebate both husband and wife.
Please adive. Thanks
I am a working in Rly & wife is a housewife. we have bought a flat where mi wife is owener(1st name) & I am the Co-owener (2nd name)of joint applicant of the property.We have availed a joint home loan for the same.Can I get rebate on Interest & principle payment for my Income Tax?
Dear Tax guru,
Myself Paardu from Hyderabad. As i am holding home loan as my father in law as main applicant and myself as co applicant because during my loan process in 2009 i don’t have ITRs so based on that i failed to become as main applicant. And the property documents are issued in the name on my father in law (wife’s father).
As we brought that flat for my family purpose, me and my wife are occupied the same and every month i am paying the EMI from my account through NEFT and same was reflecting in my salary account statement and as well as home loan account statement. My father in law never claim ITR exemption for this EMI paid as he never paid EMI for this loan. But due to recent IT notice, i have contacted one CA to help me out to submit last three years ITRs and as per his statement – i can’t claim deduction for this EMI paying as the property is not on my name but i am the co applicant of this home loan. So i request you to help me with the options to use this EMIs paying into my ITR exemption.
Waiting for your earliest help.
Regards,
Paardu
sir, my house loan is 10 lac. my wife is co applicants. IT business returns are filling annual 2 lacs by my wife. i want to paid home loan.2.5 lacs.my wife have about cash in hand 3 lac something. how paid house loan 2.5 lacs by my wife?
cheque or cash? and how show in entry my wife books?
Hi Sir,
Myself and my wife bought a flat in our both name and loan amount paid by myself. We are not staying in the same flat, this property rented out and income from house received by my wife. She is not employed and is filing return.
(Home loan is in individual name )
on the other hand, we stay in another state in a rented apartment. I am sure, I can claim interest upto 2 lakh and principal amount under relevant heads.
my doubt is here, can I claim HRA as my wife gets income from rent?
Hi
Question: Can I claim tax rebate on interest amount of EMI as per section 24 for ITR return filed for FY 15-16 as I will get possession of bought property in September 2015 (builder has offered possession in Aug-2015 but registry will be done in Sep 2015).
Thanks in advance.
Dear Taxguru,
I have a joint home loan taken for house in which we are co-owners but the ratio of ownership is not defined. I have paid all the EMIs. Can I claim the whole tax benefit as my income is in 20% slab and my wife’s income is in 10%. Also, If the construction of house is completed in Nov, 2015, then can I claim the Tax benefit for whole FY 2015-16 or only for the period Dec, 15 to mar, 16. Please guide me in the matter.
Sir,
I am working in an MNC and my wife is housewife. We have bought a flat where my wife is the owner and I am the co-owner of the property. We have availed a joint home loan for the same. Can I get the rebate on Interest and principle payment for income tax??
I have a home loan jointly with my wife as co-borrower and co-applicant in property, she is employed. Presently i am also PSU employee and the EMI payments are being met by me through my SB Account, which comes to around Rs2 lakh.entire emi paid by me can i get full benifit of tax rebate my wife is not claiming any tax rebate . THANKS
Dear Tax Guru,
I want to buy a house in mumbai worth 36 lac. my income is 18000 pm & my husbands income in 40000 per month. we want to take a joint home loan. how much loan can we get.
dear taxguru,
I with my wife is buying a home in uttar pradesh she as owner and i am as co owner. We are taking a home loan also she as applicant and i am co-applicant. But that house will be occupied by my parents only. and i with my wife will live in delhi only on rent . we both work in delhi govt. so whether we can claim tax benefit both on home loan and hra also?
I have one query regarding income tax benifit acceptance on Home Loan.
Me and My father have taken Joint Home Loan.
But i am paying EMI from my account only and My father transfer his portion of EMI from his account to my account .
Is it valid to get Income tax rebate for my father is such case or we need to open Joint account for paying EMI to get income tax rebate claim for both of us.
In first property i had taken joint home loan. First owner is my mother and i am the second owner of the flat. I have taken entire tax exemption from Home loan. The home loan is over last year.
Now i have purchased second property and taken joint home loan. Here My wife is first owner and i am second.
How can i get maximum tax benefit. can i show second property again as primary property as i am not the first owner.
Dear Sir,
I Have purchased a flat in Delhi in my wife name. She is house wife and does not have any income. I am co applicant in home loan. Can I claim income tax benefits if I Give house on rent. It is necessary for getting income tax rebate on principal and interest the house should be self occupied and not rented.
Thanks
my grandmother own a plot.i want to construct house on that plot.can i take housing loan in my name and claim deduction of loan in 80c or i have to take loan in grandmothers name to cliam deduction.please guide
i have plots in my grandmothers name.
can i take a housing loan in my name to construct house on that plot and can i take the deduction of this housing loan repayment under 80c
Hi ..i had taken a home loan when I was working but now I have got married and I am not working.so how can I file income tax
Dear Sir
can brother and sister take a loan against the property in which they are the co owners .
Kindly suggest ..
Dear Sir, I am working as Software Engineer and I took joint home loan to increase my eligibility (myself is the first applicant and second applicant is my husband.)
My Husband is a co-applicant in another home loan with his father but never taken and tax exemption on that property loan.
My question is:
1) Will my husband be able to get tax exemption on the second property (loan taken with me) as he never claimed exemption in first property
2) Will we need to have a joint account in which EMI needs to be deducted (as EMI is deducted from my husband’s salary account only) to avail tax exemption 50-50%?
Hi Tax Guru,
I am planning to buy a new home on my wife’s name(my wife would be sole owner of my new home) and she doesn’t have any source of income, I will do all down payments and will pay EMI for the same for Hloan.
Please let me know If I would get tax exemption for interest and Principle of Hloan.
Site is registered in my name does my husband is possible to claim income tax rebate. Kinldy revert
Hi,
Consider a scenario where, me and my wife take a house as joint owners. So, this implies both of us to be the co-applicants in the loan as well.
But, the emi would be deducting from my wife’s account only.
i.e., I would not be paying any role in paying back the emis. Its just my name in the owner.
Would that affect my eligibility of a future home loan.
Kindly revet.
dear sir
I have purchased a flat in Joint name with my Son. The applicant is my Son & i am co-applicant. The EMI is been paid by my son. Can i take total tax benefit .
Thanks
– See more at: https://taxguru.in/income-tax/tax-benefits-home-loan-joint-names.html#comment-1671211
Hi Tax Guru, My father is a retired person and the property and loan is on my Father`s name. Currently EMI is deducted from my fathers account. I want to convert it to my Salary account. How can I do this? Is there any provision that Son can pay remaining amount through his account and will I get the tax benefits?
Hi Tax Guru,
I am planning to buy a new home on my wife’s name(my wife would be sole owner of my new home) and she doesn’t have any source of income, I will do all down payments and will pay EMI for the same for Hloan.
Please let me know If I would get tax exemption for interest and Principle of Hloan.
dear sir
I have purchased a flat in Joint name with my Son. The applicant is my Son & i am co-applicant. The EMI is been paid by my son. Can my son take total tax benefit .
Thanks
Hi ,
W3 have planned to but a property. We are of 4 people and we are friends who are working in corporate company. Is there possibility of taking housing loan by 4 persons where all are gonna be owner of the same property with shares divided equally ? If yes, what are the advantages and what will the bank require from us ?
Dear Sir,
Me and wife have a joint home loan account. Since both are employed and fall in different tax slabs, we would like to claim the tax benefit in 65:35 ratio. The land is registered under combined ownership. Can u please advice on:
(1) what is the procedure to claim the tax benefit in 65:35 ratio
(2) is it necessary that the loan repayment shall be from individual’s account
If son pays EMI on behalf of property owned on his mothers name.Then how son shall get tax benefit..they do not have any joint accounts for EMI.or joint property agreement..mother is a house wife and husband is jobless
Hi Tax Guru,
My father is a retired person and the property is on my Father`s name.
My father took home loan for that property and I transferred that home loan to other bank and took as joint account(me and my father) and mortgage loan too.
And only I am repaying the loan EMI from my salary account.
My father can give an affidavit that he is not availing any tax benefit and he makes me the main applicant for taking the tax benefit.
Please let me know if I am eligible to take the Income tax Rebate for principal and interest both for home loan as well as for mortgage loan.
Thanks
Mohit Goyal
i am co-borrower of home loan with my second son. Is 50% tax deduction can be availed by first son. Please guided me
Sir,
I want to purchase new flats after selling previous one am I eligible for tax benefit. Please guide me
Hi Sir,
I am planning to take a house loan, property is in my Mother’s name & if i take house loan in my name, will i get any tax benifits or not?
Hi,
My father is a retired person and the property where we construct our home is on my Father`s name. Me and my father take home loan as a co-applicant for the construction of the same. And I am repaying the loan EMI.
Please let me know if I am eligible to take the Income tax Rebate for principal and interest both.
Thanks
Eldho
Hello Sir,
I have purchased a property (2 BHK Apartment).
Registry is Joint on My & my Wife’s Name but Home Loan is only on my name & I am paying the EMI on Monthly Basis.
Now I want to claim the House Loan benifit so I want to confirm that can I claim 100% Benifit of Income Tax on Housing Loan as My wife is not working.
Thank you
Rgds
Rukam Singh
Hi Tax Guru,
My father is a retired person and the property which we want to construct is on my Father`s name. I want to take home loan as a co-applicant for the construction of the same. And I will be repaying the loan EMI from my salary account. My father can give an affidavit that he will not be availing any tax benefit and he makes me the main applicant for taking the tax benefit.
Please let me know if I am eligible to take the Income tax Rebate for principal and interest both.
Thanks
Ashish
Hello,
My Father is the property owner and he is retired.
we have taken a home loan, Me and my brother are the co-applicant. I want to claim tax benefits. My organization tells I can claim home loan interest tax rebate only if I am the owner of the property. He has approved for the Principal amount under 80c.
please help me.
Regards
Raghu
I had purchased one residential plot in my name (plot registry is on my name)in year 2007. we have house building loan jointy with my wife as co-applicant. Whether income tax rebate on repayment of interest and principal is admissible to both or to one only and why?
Kindly advise pl
I and my wife have taken “Home Loan” from Bank. House is on my name(plot registry is on my name only). Whether rebate on repayment of interest and principal is admissible to both or to one only and why?
Kindly advise pl
Sir,My and my husband availed a housing loan jointly.But the property is in my husband’s name.Am I also eligible for tax benefit?
HI I am paying a home loan for the property which is in my mother in law’s 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
I and my husband have taken “Home Loan” from Bank. House is on my name. Whether rebate on repayment of interest and principal is admissible to both or to one only. According to employer, only 50 % rebate is admissible to me only, No rebate is admissible to my husband as home is not on the name of my husband. Kindly advise pl.
Can I avail two loans on the same property?
And for which loan will I et the deduction for principal repayment and interest u/s 24b?
Dear All,
I and my husband work in same company. My husband has a housing loan for a house in Davangere, which is self-occupied by his parents. We both are staying in rented house in Bangalore. My husband claims tax benefit for both HRA & home loan. Now I have taken a home loan in Bangalore my name and co-applicant is my husband.
1. Can I claim tax benefit as full EMI amount will be paid by me & site is in my name.
2.If my husbands buy a new home loan will be entitled to get tax benefit from the second property?
Sir,
I have purchased a flat jointly with my wife as co owner on Nov 14. The same is registered on both are names. Now to claim income tax, I am planning to claim 60:40% on the Home loan Interest and principal part.
1. Do I have to take a precaution for this or can we both just claim the 60:40% with the given provisional certificate by the Bank on both are names ?
2. The Registration charges where around 2,68,000/- Can I claim this also in the same 60:40 % ratio? or can only one can claim this?
Please guide me in this aspect sir.
Thank you,
sir i want home loan in lucknow but i have no evidience of income tax because whatever property i have i.e in remote area (village) and have own bussiness(jewellry shop)……..so it is possible to get loan
Dear One,
We took housing loan on my father`s name.
I am repaying loan emi, my confusion is that, is it possible to show savings to my income tax deductions?
I will be hoping for your valuable response.
Thanks,
Dear One,
We took housing loan on my father`s name.
I am repaying loan emi, my confusion is that, is it possible to show savings to my income tax deductions?
I will be hoping for your valuable response.
Thanks,