Joint Home Loan : Eligibility rules & Income Tax Benefits

Joint Home Loan _ Eligibility rules & Income Tax Benefits

Many home loan borrowers consider taking a Joint Home Loan as a practical option to get higher loan amount and also to avail Income Tax Benefits. Joint Debt has become a part of the Household finance these days.

One of the primary benefits of a joint loan is that it increases the borrowing capacity of the prospective home buyers. The combined repaying power of the applicants (two or more) is considered while sanctioning a higher loan amount.

A joint home loan not only allows you to share your debt burden but also allows you to extract maximum benefits offered by the IT Act.

As per the existing Income Tax Laws, both the individuals (loan applicants) can claim income tax deductions on the principal repayment under section 80c and on the interest amount under Section 24. The maximum amount that can be claimed as tax deduction depends on the use of the property ie whether it is a ‘Self occupied property’ or a ‘Let-out property’.

What is a Joint Home Loan? – A joint home loan is a loan which is taken by more than one person.

Who is a co-borrower? – A Co-borrower is a person with whom you take the home loan jointly.

Who is a co-owner? – A Co-Owner is an individual that shares ownership in an asset with another individual / group.home

Joint Home Loan & Eligibility rules / Conditions

  • Generally a Joint Home Loan can be taken by a maximum of SIX persons (minimum being two applicants).
  • A co-borrower (loan applicant) may or may not be the co-owner of the property. But, banks may usually recommend a co-borrower to also be a co-owner of the property. Do note that, being a co-borrower for a house does not automatically make one a co-owner.
  • Repayment of a joint home loan is the collective responsibility of both the borrower and co-borrower(s) and each of them is liable for the loan.
  • If the loan applicants are married couples then it is a perfect arrangement for home loan providers. The couple is at liberty to decide if they want to be co-owners or if only one of them wants to be a co-borrower.
  • If the loan applicants are Father & son or Father & unmarried daughter then Lenders generally insists on the son / daughter being the Primary Owner of the property. (This can be applicable when Mother & unmarried daughter are the borrowers)
  • If the loan applicants are ‘brothers’ then banks insists on they being the co-owners of the property.
  • Generally, friends or unmarried couples living together are not allowed to take joint housing loans.

Joint Home Loan & Income Tax Benefits

  • Section 80cAs per this section, the repayment of principal amount of up to Rs 1.5 Lakh can be claimed as tax deduction by the applicants individually. All the co-borrowers can avail tax benefits. If there are two co-borrowers then the maximum total tax deduction under Section 80c can be up to Rs 3 Lakh (subject to actual principal repayment amount).

Example : Where the husband and wife as co-borrowers are paying a total of Rs 1 Lakh as Principal element of the home loan EMI, each of them can avail tax exemption of Rs 50,000 individually.

  • Section 24As per this section, the interest payment of up to Rs 2 Lakh (for Self occupied property) can be claimed by the home loan borrowers. If there are two co-borrowers then the maximum total tax deduction under Section 80c can be up to Rs 4 Lakh. (The maximum interest amount that can be claimed as tax deduction u/s 24 is unlimited for a Let-out property).

Example: Where the husband and wife as co-borrowers are paying a total of say Rs 2.5 Lakh as Interest element of the home loan EMI, each of them can avail tax exemption of Rs 1,25,000 individually (assuming the share in the home loan as 50:50)

  • Ownership -To avail the income tax benefits on a Joint Home loan, the co-borrower of the loan has to be the co-owner of the property. So, if you are a co-borrower but not a co-owner of your property then you can not avail the income tax benefits. (Co-ownership is mandatory to avail income tax benefits. So, if you and your spouse are co-borrowers for a property owned by another family member then you are not eligible to claim any tax benefits, as you don’t own the property.) 
  • Ownership ShareThe share in tax exemption that each co-borrower gets is in proportion to the ratio of ownership in the property. Therefore, it is advisable for joint owners to procure an ownership sharing agreement stating the ownership proportion on a stamp paper as legal proof of the ownership. 

Suggestions

  • Highest tax bracket: The tax benefits are applicable in ratio of ownership in the property and therefore the ownership of property should be carefully decided keeping in mind the re-payment capacity of both the borrowers. A co-borrower who is earning well and is in the higher income tax slab rate can opt for higher share in ownership / Loan EMI.

Example : Santosh & Sahya (husband & wife), both are independent salaried individuals. Sahya is in higher income tax slab rate when compared to Santosh. They acquire a home loan of Rs 50 Lakh @ 10% for a tenure of 20 years. The EMI on this home loan is Rs 48,251. As Sahya is in higher tax bracket, they decide to have 60:40 ownership ratio. Sahya wants to pay 60% of the EMI amount to take the maximum benefit of tax savings.

  • Joint Home LoanLiability: All co-borrowers are jointly and severally liable to repay the loan. So, it is prudent to consider entering into an agreement about the splitting of loan liability with other co-borrower(s) to avoid any clashes in future.
  • Insurance: It is advisable that all the borrowers should take separate Term insurance plans (better to avoid Mortgage insurance) to mitigate the financial burden on one spouse / co-borrower in case of other’s demise. This way he /she can get the best out of the tax savings.
  • Unfortunate Events: In case of divorce or a co-borrower files for insolvency or a co-borrower passes away, it becomes co-borrowers’ responsibility to pay the entire loan. The repayment record of a joint home loan reflects in the credit score of all co-borrowers. So, in the event of any unfortunate incident, it is advisable to identify an alternate co-borrower (if it is not possible to convert a joint home loan to a single loan).

FAQs on Joint Housing Loan

  • If I buy a house jointly with my spouse and take a joint home loan, Can we both claim income tax deduction? – Yes, if your spouse has a separate source of income, both of you can claim tax deductions individually.
  • My husband and I have jointly taken a home loan. He pays 60 percent of the EMI and also has 60% share in the property . What will be our individual tax benefits? – The tax benefits are dependent on the share of ownership. So, both of you can claim tax deductions in the ratio of ownership i.e., 60:40.
  • I have a home loan in which I am a co-applicant along with my wife. However, recently she resigned from the job and now the total EMI amount is paid by me. What is the total income tax exemption that I can avail of? – As long as you are co-owner & co-applicant of a home loan, you can claim tax benefits. If you are the only one who is repaying the loan, you can claim the entire tax benefit for yourself (provided you are an owner or co-owner). You can enter into a simple agreement with the other borrower(s) stating that you will be repaying the entire loan amount.

It is evident that besides the benefits that a joint home loan brings along, it is important for both partners (or all the co-borrowers) to understand their responsibilities towards the loan and its implications.

Though joint home loan makes you eligible for higher loan amount and also offers tax benefits, do not over leverage yourself. Do prioritize your financial goals and then take a decision to acquire a housing loan jointly.


Latest update (Budget 2017-18) : Tax benefit on loan repayment of second house will be restricted to Rs 2 lakh per annum only.


Continue reading :

  1. Income Tax Deductions List FY 2019-20 | List of important Income Tax Exemptions for AY 2020-21
  2. Checklist of Important Property Documents in India | Legal Checklist for Property Purchase

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  • rakesh chopra says:

    Please advise on a joint home loan between mother and only son in a ratio of mother (60%) and son (40%) both are salaried, but son wants to pay the entire emi and mother will only act as a coowner of the property
    and coborrower of the property

    • Sreekanth Reddy says:

      Dear Rakesh,
      If mother is not going claim the tax benefit then Son can enter into a simple agreement, get it signed by the mother and submit it to his employer. Make sure the EMIs deduct solo (son’s) bank account.

  • Kamble says:

    for claiming HRA benefit what documents are needed to submit employer

  • Subeer Ch Dey says:

    Hi Sreekant, hope you’re well. Me and my spouse are co-owners and Co borrowers and my wife is a bank employee. Our EMI is being directly deducted from her salary A/C and I transfer funds to her A/c. Our flat has no ratio value declaration. Till now we both have claimed and no objection have come up.
    My questions are
    1. Can we both claim exemption under 80c?
    2. What are rules regarding Housing Loan Interest Deduction and principle for both of us?
    3.If no exemption to both of us as per IT rule then how to rectify this?

    Thank you in advance.

  • CJ says:

    Hi Sreekanth, had a quick query.. my husband and I are co-borrowers and co-owners of a flat.. my husband is selling a site for which is the sole owner (gift deed not possible due to shortage of time). What component of the loan can he repay (within a year of new purchase of flat) to save on capitals gains tax – will it be 50% of the property value or 50% of the loan amount? Thanks in advance.

    • Sreekanth Reddy says:

      Dear CJ,
      Kindly go through the below article and revert if you have any more queries..

      How to save Capital Gains Tax on Sale of Land / House Property?

      • CJ says:

        Thanks for your quick response, my query is a little more specific. My husband and I bought a flat this January 30th (2020) with an HDFC loan. We are co-owners and co-borrowers (both 50%). We are selling a residential site (bought many years ago) in a few days. If we manage to do it before Jan 30th, can we use this sale money to pay part of my flat loan and save on some capital gains tax? If yes, can we use it to pay the bank 50% of the property value or 50% of the loan amount as the site is registered only in my husband’s name and we do not have time to make a gift deed of 50% in my name. Really appreciate your help on this. Thanks.

        • Sreekanth Reddy says:

          Dear CJ,
          If you use the capital gain amount to clear loans then tax on LTCG cannot be saved.
          I believe that no exemptions can be claimed.

  • Bipin says:

    Hi Sreekanth
    I had purchased a flat in Sep-2018 in my(Govt. employee) and my wife’s(Pvt. employee) name.
    Home loan is also on our names. But the 100% EMI is paid by myself (my bank a/c, not a joint a/c) only,
    there is no contribution from my wife in EMIs.
    Till now, rent earned was shown 50%-50% in our tax returns (in FY 2018-19 ITR).
    But in Dec-2019, my wife quit her job.
    1. Can I claim 100% home loan interest + principal amount now as she is unemployed ?
    2. Can the rental income be claimed by me 100% or it still need to be 50-50% ?
    Please elaborate the tax implications for FY 2019-20 and FY 2020-21.

  • DIPTI RANJAN SAHU says:

    Hello Sir

    I want to take a home loan for Self and my Brother. I am a salaried person and my Brother do work in wages…but one problem is property is in My mother’s name alone… then how can I take home loan on my mother’s property for construction house for both me and my Brother…. please guides us sir…

  • Sanjay says:

    Dear Shrikant, in one of your replies you said that when husband and wife are the co-owners and co-borrowers but husband only pay the entire i.e. 100% EMIs, then he can claim 100% tax benefits subject to entering into an Agreement in between the two. Can you please share or quote the rule position of latest IT Act to that effect so that I can submit the same to my employer/department along with that Agreement? Please..

    • Sreekanth Reddy says:

      Dear Sanjay,
      You may kindly check with your employer on this.
      Coz some employers agree a simple agreement and some do no.
      As of now, I do not have the IT circular..will check..

  • Anand says:

    Sir ,
    I have a home loan in which I am a co-applicant along with my wife but home is with the name of my wife only. She is housewife and I am paying 100% loan EMI.
    can i claim tax benefits ?

  • Hitesh khatri says:

    Hi Sreekanth,

    I have a question for the home loan. As I took a loan in which I am the borrower and my mother is co-borrower. And in registry I am the owner and my mother is co-owner. Now I will pay complete loan emi and my mother is a house wife and there is no income by my mother. I told this thing in my office and they are telling in this case you can get only 50 tax benifit. I told them I will make an agreement to state that I will pay complete emi’s and all emi will be deduct form my account, there is no contribution by my mother in emi.

    Please suggest what should I do in this case.

    Thanks

    • Sreekanth Reddy says:

      Dear Hitesh,
      Ideally, you can claim tax benefits as per your ownership share in the property.

      However, You can enter into a simple agreement with the other borrower(s) (your mother) stating that you will be repaying the entire loan amount or higher EMI, this can be on stamp paper and mutually agreed upon.
      You can submit this agreement / self-declaration to your employer.

      • Hitesh khatri says:

        Is there any specific format or template for this agreement? Then please share if you can.
        My Email : khatrihitesh$$@gmail.com

        • Sreekanth Reddy says:

          Dear Hitesh,

          You may consider below format (this is not a starndard one, you may edit it as per your requirement).

          To Whom It May Concern

          You may consider below format ;

          I ………………………………….working as …………………… (designation) in ……………………(name of the organization and branch) bearing employment no……………………., availed joint housing loan from the ………………… (name of the bank and branch) bearing loan account no………………………………… I here by declare that the interest amount mentioned in the provisional certificate is claimed by me to the extent of Rs…………….. and regarding the principal amount which mentioned in the provisional certificate is claimed by me to the extent of Rs……………………..

          Date:
          Place:

          Signature

  • Shweta says:

    hi, Sreekanth,

    Me and my husband have purchased a flat from a joint homeloan. We are sharing EMI’s 50% each from a joint account. Can i claim tax benefit on 100% principal amount and only 10% for interest part. My husband wants to take benefit of 90% interest part this year. Kindly clarify.

    • Sreekanth Reddy says:

      Dear Shweta,
      I believe that kind of arrangement may not be possible.. Ideally, by default the joint owners has to claim tax benefits as per their Ownership share in the property.

  • Cherian Mathew says:

    Dear Sir,

    I and my wife has taken a housing loan in the joint name and the property is owned by both jointly. As per my understanding we can claim Income Tax Exemption in 50:50 ratio of the principal and interest payment. My Query is: Is it possible that I can claim IT exemption for only Principal Amount and my wife can claim IT exemption for only Interest Amount ?

    Thank you.

  • joy says:

    Hello Sir,

    Me and my mother have a joint home loan where I am co-owner in property and also co-borrower in loan…
    All deduction of loan instalment is from my mother bank account.

    I am an employee in one organization till now I am just transferring some half amount into my mother bank account and showing 50% for a tax benefit in my income tax return.

    is there any way I can show all amount (100%) as a tax benefit in my income tax return.

    in short, I want to show full home loan benefit from my account is there any way?

    • Sreekanth Reddy says:

      Dear joy,
      Both of you can submit a request of change of bank account to your lender, get the future EMIs deducted from your bank account.

      Ideally, the tax benefits have to be claimed proportionately based on the ownership share in the property.

      If you are going to pay 100% EMI, you can draft a simple agreement, get it signed by your mother and submit it to your employer.

      • Joy says:

        To pay 100% emi do I need to change bank account of my mother with mine for EMI deduction or should I just transfer amount to my mother bank account ?

        • Sreekanth Reddy says:

          Dear Joy ..Advisable to get the EMIs deducted from your bank account!

          • Jigar says:

            What if I transfer all instalment money to my mother account and show 100% tax claim in my account

          • Sreekanth Reddy says:

            Dear Jigar,
            It is your choice to make things simple or complex!
            It may not be a wrong-way of doing..but can be inconvenient to you in case of any (tax) scrutiny, to justify your stand..

  • Praveen says:

    Hi Sreekanth Reddy,

    I have read your blog. And still has this doubt.

    I and my wife are co borrowers and co owners of the housing loan and property respectively. My wife is a house wife. I am paying the whole EMIs. What are the ways to claim full tax rebate. I have read some of your answers but did not get clarity

    1) Is it possible to ask for the Bank to give loan statement on my name itself even though it is joint home loan?
    2) If we have to draft an agreement. What is it? Is it on Stamp paper? or just a declaration from her? Is there any format?

    Can you please help me out

    • Sreekanth Reddy says:

      Dear Praveen,
      Ideally, the tax benefits have to be claimed as per the ration of ownership (50:50 by default).
      In case, you are paying 100% EMI, you can pay it from your individual Sole Bank account and get a normal agreement from your Spouse. You can submit this agreement (that she is not going to claim tax benefit on home loan payments) to your Employer (if employed).

  • Naveen says:

    Hi EveryOne ,

    we are 2 brothers married and 1 sister married with one property in my fathers name who is retired now of independant house ground floor ,

    1.We 2 brothers wanted to construct 2 floors one for each taking the joint home loan
    are we eligible for tax exemption
    if not can you suggest what needs to be done to get joint home loan and tax exemption for both of us (brothers)

  • Sai Kumar says:

    Hi Sreekanth,

    My friend has purchased a land in FY 2010-11.

    Now he along with his wife (in the year 2018-19) has constructed the house jointly on the above said land.

    Loan was taken for construction of building jointly and EMI is being paid by both of them.

    Now the interest on loan borrowed by both of them even though the land is registered by single person.

    If no, is there any alternative to claim interest by both the people.

    Regards
    Sai Kumar

  • Natasha says:

    Hi Sreekanth, this query is for a friend. My friend and her husband bought a flat which they are living in currently. Both of them work as salaried professionals. But the flat is registered in the name of the wife and the loan is also in her name from SBI Bank (w.e.f. Dec 2018). So at the moment only she is able to take advantage of IT benefits.

    Now that they realise that they both could have availed tax benefits, what will be the process of ensuring the husband is also able to get tax benefit (of interest and principal) for the same property. Please note that they don’t have any other property.

    • Sreekanth Reddy says:

      Dear Natasha,
      She can execute a Gift Deed by gifting an ownership share in the property to her husband.
      If she gifts 50% share then both of them can claim 50:50 tax benefits on home loan.
      They need to inform their banker on this and take consent.

      Related articles :
      * 5 ways of transferring your Immovable (or) Real Estate Property
      * Got a Gift? Find out, if it is Taxable or Tax-free?
      * Can a Mortgaged property be Gifted, Willed or Inherited?

      • Natasha says:

        Hi Shreekant, Thanks for the super quick response.

        Also another query. As she has taken a loan in this year financial (2018-19), the stamp duty and registration amount which is more than 2 lakhs would be part of the deduction in Sec 80 C for her. But the limit is only upto 1.5 lakh. If she adds her spouse this year through gift deed, would he also be able to claim 50% of the stamp duty and registration amount under section 80 c (as part of the 1.5 lakh).

        Or is there any other way both of them can ensure that they get maximum tax benefit of the registration charges paid.

        • Sreekanth Reddy says:

          Dear Natasha,
          Yes, if the gift deed is done then both of them can claim the 80c benefit.
          If the charges are say Rs 2 lakh and ownership share is 50:50, then they can claim Rs 1 lakh each u/s 80c. Kindly note that the overall threshold limit of 80c is Rs 1.5 lakh each.

          “For claiming stamp duty deduction u/s 80c, you must possess the house also i.e. Payment for under-construction is not allowed. In simple words both payment of expenses and possession of the house must be in the same fiscal year for claiming expenses.”

          • Natasha says:

            Thanks Sreekanth .. your answer truly helps..Heartfelt thanks for your quick and detailed response 🙂

          • Sreekanth Reddy says:

            You are welcome dear Natasha.. Keep visiting ReLakhs.com for all your personal finance related matters..cheers!

  • DANDAPANI T says:

    Dear Can you post the steps to avail Tax benefits on second hoem.
    Can we gift deed the first home to our kids name and avail sec 80 c ??

  • Sagar P says:

    Hi Sreekanth,
    I have taken home loan from LIC Housing Fianance as a co-borrower. The land is registered in my father’s name and I’m not a co-owner. When I tried to submit for tax exemptions through my company, they are rejecting it by telling I need to be a owner or co-owner of property. When i initially enquired with LIC before taking loan mentioning my father is non- earning member and I’m not co-owner but would I be eligible for tax exemptions, they said yes. Now after taking loan and my IT filing application is getting rejected and I’m not sure what to do next. I enquired with LIC again multiple times they are telling there are lot of people who have taken loans in such a way and taking IT exemptions but I didnt get a contact detail of person who is doing in such a way. Can you suggest here please.

    • Sreekanth Reddy says:

      Dear Sagar,
      Your employer is right. One needs to be an owner/co-owner to claim tax exemption on home loan.

      Your Lender is misleading you..

      Your Father can execute Gift Deed and can gift you a share in the property. But, you need to inform your Lender (LICHFL)

      Kindly read:
      5 ways of transferring your Immovable (or) Real Estate Property
      Gifts & Tax implications!

  • Kamal says:

    I got home loan from Kanchipuram Co-operative Society Bank.Am I eligible for Tax exemption.

    • Sreekanth Reddy says:

      Dear Kamal,
      Yes, you can claim.

      For claiming interest deduction of home loan u/s. 24b, no specific conditions…..

      But, for claiming deduction of principal amount u/s. 80C::

      Loan should be taken from Specified institutions/dept only, as given below :
      Central or State Government any Bank including co-operative bank .
      LIC or National Housing Bank .
      Public company formed and registered in India or co-operative society with main object to provide long term finance for construction purchase of houses in India.
      Assessee’s Employer if public company or public sector company or university established by law or a college affiliated to such university or local authority or co-operative society.

  • Gautam Saraf says:

    Dear Sreekanth,

    Me and my wife are co-owners and co-borrower for the home loan taken for 20 yrs period. Over last 4 yrs I am paying all the emis and claiming the tax benefit.

    However last month we have done the repayment partly from my account and her account. Can you pls guide me how to factor during tax declaration with minimal tax implications since my wife doesn’t come under tax bracket.

    Regards/ Gautam

  • PRATHEESH says:

    i took a renovation loan of my fathers house , my wife and me are co borrower of the loan. installment deducted from my wife’s account . Is both of us get 60000(ie 30000 fro me +3000 for my wife ) get income tax exemption for it?

  • Siddesh says:

    Can i change the ratio of claim with my spouse be varied to 50:50 this year and 60:40, 70:30 in subsequent years to maximize the home loan benefit.

    • Sreekanth Reddy says:

      Dear Siddesh,
      You may then have to get the ownership share changed/updated in your Sale Deed. Also, you may have to justify this to the IT dept in case you receive any scrutiny or compliance notice..

      • Siddesh says:

        But we cant change Sale deed as and when required without any charges write.I Just entered into agreement with builder as it is under construction property and i dont know how easy or tedious to change sale deed subsequently.

  • Ashitha says:

    Dear sir, I am a co owner and a co borrower with my husband for a residential property and we have availed home loan. Besides this my husband also has a home loan for another residential property in another state. His parents reside in it. My question is:
    How should we claim tax benefits? And do we need to show the other property as let out and show some income even though we have not put it on rent? Can my husband claim interest and principal 50:50 in the joint loan and full interest band principal in the home loan in which his parents stay?

  • Dhiraj says:

    We are planning for home loan,
    Where myself, my father and brother all will be coowner and coborrower. But the emi will be paind from my account.
    Will the other 2 parties get tax benefits

    • Sreekanth Reddy says:

      Dear Dhiraj,
      You can get one self-declaration done from the other two that you will be claiming 100% tax benefit.
      You may also check with your lender if it is possible to issue loan statement in your name alone..

  • Bhargavi says:

    Hi,

    My mother (63) wants to re-invest her sale proceeds that she got in March end as a down payment for flat that I (daughter) would buy on home loan, such that we both would be the owners of the property, but only I would repay the loan as she is not working.
    I want my father (retired & a marginal tax-payer) also to be the co-owner of the flat.

    1. Does my mother get the capital gains tax benefit being co-owner?
    2. If all three of us (mother, father & daughter) are co-owners, then can all three of the owners can claim the tax-benefits of the interest on home loan and principle payment?
    or only I would get the benefit as only I am repaying the loan?
    3. If all three of us can get tax benefit, is it proportional based on the ownership ratios if any, or in full?

  • Ninad says:

    i hvae taken a home loan and a co-owner with my wife, the amount would be deducted from my wife’s salary account, how can i avail the tax benefit kindly advice.

  • n kumar says:

    dear sir,
    me and my wife are co owners and co borrowers of our home loan amounting 4500000. but she only is paying the loan. i am also salaried but currently not paying anything as the bank only authorized her account for loan payment. am i eligible for tax benefits if i am not paying the loan. and also how can i also enroll myself to pay the loan.

    • Dear kumar,
      If you are a co-borrower on loan, you also can claim tax benefits as per you share in the property/loan.
      You may request your lender to deduct EMIs from a joint account (if you have) held by both of you.

  • Nihal Walia says:

    Hi Srikant,
    I and my wife are co borrowers and co owners of the housing loan and property respectively. My wife is a house wife; I am paying tje whole EMIs. Can I get full tax rebate?
    As my accountant refuses to do so.
    Please can you help me with some suggestions and some procedure of availing that 100 % rebate?

    • Dear Nihal,
      Your wife and you can draft an agreement that you will be claiming the entire the tax benefits and she is not going to do that.
      Also, you can ask your lender to give loan statements in your name alone henceforth.

  • Shwetha says:

    Dear Sreekanth,
    If father and unmarried daughter are co-applicant and applicant of a home loan & father is the only owner of the property. The daughter cannot claim tax rebate for the loan bcz she is not a co-owner for the property. Now if she becomes a co-owner will she get tax rebate for this year and the coming years of home loan to be paid. And is it possible to get rebate for the past years where emi was paid for the loan.

  • Krithiga says:

    Hello Sir,
    Me and my husband are planning to go for a home loan for 50L. We both are co-borrowers for the loan and co-owners of the property. Can we both claim the tax exception of 2L for the home loan interest?

  • Lakshmi says:

    Hi Sreekanth,

    Me and my husband would like to take loan jointly. So how will the interest rate…will it be of a woman or man

    Ex : SBI
    for women it is 8.5%
    for men it is 8.55%

    so what will it be for a joint loan

    • Dear Lakshmi,
      You need to be primary applicant and primary owner in case if the property is going to be jointly held.

      “This is a home loan scheme designed especially for women applicants. A woman needs to be the sole applicant or the primary applicant for this type of home loan. Also, the property for which home loan is being taken should be in the name of the woman applicant or she should be the primary owner in case it of joint ownership. “

  • Kapil says:

    Hi Sreekanth,

    I have a let out property and I am co-owner alongwith my wife and mother (both housewives) on this. I am co-borrower of home loan alongwith my wife (my mother is not co-borrower). For last few years, I was paying the entire EMI, so I was claiming all the interest tax exemption and was also declaring entire rental income in my IT return. Hope that is ok ?

    Also, now I want to claim interest exemption and declare rental income according to the share I hold. Can I do that change ? If yes what proportion of interest can I claim and what proportion of rental income can I declare.

    • Dear Kapil ..The proportion can be based on the share of ownership mentioned in the Sale deed.
      If nothing has been mentioned, each of you can get 1/3rd share.

      • Kapil says:

        Hi Sreekanth,

        Actually only I am paying the EMI (my wife and mother are housewives and dont have any other income. Also, only I and my wife are co-borrowers on home loan). So, can I claim entire interest deduction (100%) while declaring 1/3rd of rental income (because as per registered deed I, my wife and mother are owners).

        Note that so far I was claiming 100% deduction and declaring entire rental income in IT returns.

        • Dear Kapil,
          You may claim 100% tax benefit and also declare 1/3rd of rental income.

          • Kapil says:

            Thanks Sreekanth. But, what is the logic /IT provisions to be used to claim 100% tax benefit and 1/3rd of income. Will there be any compliance review from IT dept because of the change. Can I claim back additional income tax i paid in last few years (by declaring entire rental income).

          • Dear Kapil,
            As you are paying the whole EMIs, you can claim 100% tax benefit.
            Rents – Ideally they have to be claimed as per Ownership ratio.

  • Raju says:

    I have purchased a Home. Registry is in Name of my wife. Loan is in my name as I am doing the Job.Wife is housewife. Please let me know if I can get the Tax Rebate benefit from home loan or not.

    • Dear Raju.. As you are not owner/co-owner of the property, you may not be eligible to claim tax deduction on homeloan.

      • Raju says:

        Thanks For Reply Sreekanth !
        I have still some questions.
        1. You have mention “May not” it means there are some possibilities that i can go ahead for Claim Tax deduction. Is It ?
        2. During disbursement of home loam both me/my wife has signed the forms then bank has disbursed the amount. Also i have mentioned in Bank papers that wife name will be in Registry and i will be paying home loan for Tax rebate.
        3. Is it possible now to transfer Registry from my wife name to my name and in that case can i get Tax benefit.If yes and possible please share the possible.

        Thanks

  • Amarnadh G says:

    I am not a co-owner for my home (my mother only owner). But am co-borrower in home loan with my mother. So can i claim tax benefits??

  • SURAJ says:

    Dear Sir,

    Me and my brother have taken a home loan. Total EMI is paid by me. In the F.Y 16-17 I have paid Rs 265000/- as interest. Is it possible for my brother to claim Rs 65000 u/s 24. I have already claimed the max amount of Rs 200000/- in my return.

    • Dear SURAJ .. Every year the ratio of claim (tax benefits) can not be changed, you may have to respond to compliance notice (if any) issued by the Tax dept. If you are paying all the EMIs then only you can claim 100% tax benefits.
      (or) Both of you can claim as per ownership ratio.

  • Arif says:

    Hi Sir my name is Arif i need to know that i had bought a house in noida extension in 2010 which i still under construction so taking benefit of tax for principle part on the home loan.
    Coj there is no possession offered till now so i am not taking tax benifit of intrest.
    Now i didnt got possession of the said flat and there seems no possibilities for next 2-3 years , so i am planning to take a new ready to move in flat combined with my wife in noida as an co owner and a co applicant in home loan.

    now i wanted to know as she is a house wife an i am the one who will give all the emis to bank so pls tell me can i claim both the properties principle part and ready to move in property intrest part also and can i also claim under construction property intrest part also or after its possession given then i can claim the intrest part too.

    i want to claim both the property benfits in taxation pls help so want to know the rules to get the benifit of both.

    • Dear Arif,
      Kindly note that no deduction would be allowed under section 80c also, for repayment of principal for those years during which the property has been under construction.
      If you are going to pay EMIs completely, you can claim tax benefits after taking the possession. You may request your Lender to issue loan statements in your name alone. Suggest you to pay EMIs from your individual bank account.
      From FY 2017-18, maximum Rs 2 Lakh only can be claimed as loss from property.
      Kindly read : Latest IT exemptions from FY 2017-18.

  • Amit Jog says:

    Hi,
    I have a home loan along with my wife, she is co-owner and co-applicant both.
    Till now we both were claiming 50-50 of income tax rebates available under section 80C and 24. Not explicitely declared though.
    However from this year onwards, I want to claim only interest portion of the EMI as my 80C is already full with other investments.
    Can I do that, in such a way that My wife would claim only 100% principal part, and I shall be claiming only 100% interest part of EMI.
    In addition to the above question, can we change the claim amount %ge every year by way of declaration.
    How do we declare? what is the procedure.

    • Dear Amit,
      I dont think it is allowed to claim only interest payments by one tax assessee and other co-owner to claim principal portion..
      Every year if you change the claim amount, you may get compliance notice from the Tax dept.
      You may kindly consult a CA and take advice.

  • triveni shanker verma says:

    Me and my mother had taken a home loan for construction, she is the borrower & owner of the property and I am the co borrower of the loan. My mother is house wife and father is Govt. Employee. Being a government employee Can I take the benefit of tax exemption under 80 C and Section 24.

  • Mayank Kothari says:

    Me and my brother have taken a joint home loan. We are co-owners of the property.
    Last week I opted for a free cibil report. Score is good above 750.
    But I noticed that the home loan is being displayed against my name as Individual home loan and not a joint one.

    Is this fine OR should I raise a dispute there? Please advice.

    • Dear Mayank ..Suggest you to kindly first contact your lender and check the type of Loan.
      They might have reported it as individual loan to CIBIL.
      If so, raise the dispute and also inform your lender about this.

  • Ashish says:

    My Wife along with her father had taken a loan from LIC in 2010 (before our marriage). Now she has got the possession of the house in April 2017 and wants to transfer loan to ICICI or any other bank offering economical loan rates.

    We are given to understand that bank dont allow loan transfer is the applicant is a women and her father?? My wife is working and income tax payer and her father is a retired GOI official.

    Is there a rule that banks do allow loan transfer for women applicant who co apply with their father??

    • Dear Ashish ..There is no such rule but it depends on a bank’s loan eligibility rules/guidelines .
      Banks generally prefer a married lady to have her spouse as a co-borrower than her father as a co-applicant.

  • Paresh says:

    Dear Sir,
    I alone own a flat which is SOP and there is no homeloan on it now. Now I am planning to purchase another home in the same city for my younger brother which I jointly owns with him (there will be no share defined in the property). We both are deciding to pay EMI in 50:50 ratio. For him it will be SOP but for me I think it will be DLOP.
    In my company I need to declare tax investment and I need to declare this new flat as either SOP or LOP. Now if I am declaring it as LOP then it will be asking me to show rent income as well. I am confused, Can I just show it as SOP and claim 2 lacs benefit?

    Thanks.

  • Jignesh Shah says:

    Dear Mr. Sreekanth,

    I already have Home No 1 on which I am alone paying EMI and claiming tax rebate on both principal & interest.

    I have taken under construction 2nd home in 2014 which has been registered in 2015 (both me and my wife are co-owners however there is no pre-defined ratio of owning) and have taken home loan (both me and my wife are co-borrowers however there is no pre-defined ratio of borrowing). My wife is not earning and is a house wife and does not have any income tax filing done till date. Unfortunately, now the income tax rules have changed under sec-24 which has limited the set-off limit of 2L on 2nd home. Right now I am paying interest to my banker as per moratorium period of loan. Possession will be given to us by builder in Oct 2017. I would be renting out this home no 2.

    Thanks in Advance.

    Please guide me how can I maximise the benefit of interest set-off in above case.

  • Vishwas Gaur says:

    Dear Sir,

    i have a query as follows:-

    1. I have a flat jointly owned with my father in 50-50 ratio and it is now occupied by my parents. The home loan has been repaid. It is in Ghaziabad.
    2. I have purchased a new flat in which i am going to reside myself with my spouse and children. I have taken a home loan on this and shall be availing it relief as a self occupied house property.
    My query is whether i need to declare rent income form the jointly owned property wherein my parents reside and actually there is no rent income. Do i have to consider this as deemed rented out property.

  • Uday says:

    Hi Srikanth
    I am planning to buy 2nd house for rental income. I am taking home loan in the name of wife(housewife). I will be co-borrower. House will be registered under my wife. Can I claim tax benefit under head of the income

  • Shekhar says:

    Hello Sreekanth,
    Land is in my wife’s name & she is a house wife. I am a salaried employee & have taken the construction loan as Applicant & my is a co-applicant for the loan.

    Can I claim tax exemption in this case. If yes, please explain me how.

    Thanks in Advance.

    Regards,
    Shekhar.

  • Pulkit Maheshwari says:

    Dear Sir,

    Kindly clarify

    Me and My Mom are joint loan account but my mom is house wife and i am salaried person so EMI Pay fully 6802/- Per Month by me but House owner is my Mom so can i claim full tax befits

    if yes which section i will claim this benefits.

    Pls answer ASAP

  • Prasad says:

    Hi…
    My name is Prasad. i need loan for construction house. I am a Photographer, I don’t have Income Tax Returns.
    I eligible or not

    • Dear Prasad ..The eligibility criteria to get a loan can vary from bank to bank/NBFC.
      But, generally most of the lending institutions ask for previous years ITRs/bankstatements etc to arrive at loan amount that can be given to a loan applicant.

  • Subhash says:

    Hi Shreekant,

    Subhash Here.

    We want to purchase a ROW house ( others home ) which is comes under CIDCO, Navi Mumbai. The owner has decided the sell prize is 40 Lakh. & we want to purchase it with jointly of 5 member ( me , my wife father , brother & Jiju ). Our joint income is Rs. 1.20 lac per month by salary. & that house is divided into 5 small rooms which will give rent of Rs.25000 which will help us to repay loan amount as EMI.

    My question is to you is :

    1. Is it possible to have joint home lone of 5 members ?
    2. Is there any tax benefit jointly or individually. ?
    3. my father is State govt employee & rest of all are engineer by profession. Any Benefits to avail Loan ?
    4. Can we get LOAN of 40 lac ?

    I appreciate your early response. Thanks in advance.

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