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.
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 80c – As 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 24 – As 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 Share – The 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.
Liability: 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 :
- Income Tax Deductions List FY 2019-20 | List of important Income Tax Exemptions for AY 2020-21
- Checklist of Important Property Documents in India | Legal Checklist for Property Purchase
(Image courtesy of Stuart Miles at FreeDigitalPhotos.net) [whatsapp]
for claiming HRA benefit what documents are needed to submit employer
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.
Dear Subeer,
I am doing good thank you! Trust the same with you!
1, 2 & 3 – Yes, in the default ratio of 50 ; 50.
Related articles :
* Understanding Tax Implications of Income from House / Property
* Income Tax Deductions List FY 2020-21 | New Vs Old Tax Regime AY 2021-22
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.
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?
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.
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.
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.
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…
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..
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..
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 ?
Dear Anand,
As you are not the owner/co-owner of the property, you can not claim tax benefits on home loan..
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
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.
Is there any specific format or template for this agreement? Then please share if you can.
My Email : khatrihitesh$$@gmail.com
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
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.
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.
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.
Dear Cherian,
You may not be able to claim like that (though Tax law is unclear on this..).
Related article : Income Tax Deductions List FY 2019-20 | List of important Income Tax Exemptions for AY 2020-21
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?
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.
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 ?
Dear Joy ..Advisable to get the EMIs deducted from your bank account!
What if I transfer all instalment money to my mother account and show 100% tax claim in my account
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..
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
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).
Thanks for the reply.
Agreement should be on legal stamp document or just a self-declaration kind of document?
Dear Praveen..I think self delcaration should be ok..
Thank you very much Sreekanth. I appreciate your quick responses to our queries as well.
Your blog clarified most of my doubts. I verified with my employer and they also confirmed that self-declaration is sufficient.
You are welcome dear Praveen!
Keep visiting ReLakhs.com..
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)
Dear Naveen,
If the property is your father’s name alone then both of you (home loan applicants) can not claim tax benefits.
Your father can make two/three of you as joint owners through a Gift Deed.
Kindly read :
* 5 ways of transferring your Immovable (or) Real Estate Property
* Joint Home Loan : Eligibility rules & Income Tax Benefits
* Got a Gift? Find out, if it is Taxable or Tax-free?
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
Dear Sai,
If the property is owned by only one of them then only that person can claim tax benefits on home loan.
Alternative is, he can gift an ownership share to his spouse. Prior to this, they need to inform the Lender/banker on this, take their consent.
Kindly read :
* 5 ways of transferring your Immovable (or) Real Estate Property
* Gifts & Tax implications!
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.
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?
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.
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.”
Thanks Sreekanth .. your answer truly helps..Heartfelt thanks for your quick and detailed response 🙂
You are welcome dear Natasha.. Keep visiting ReLakhs.com for all your personal finance related matters..cheers!
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 ??
Dear DANDAPANI,
Once you Gift the property, the ownership changes and you may not be eligible to claim tax benefits.
You may go through below articles for more details;
* Understanding Tax Implications of Income from House / Property
* Can a Mortgaged property be Gifted, Willed or Inherited?
* 5 ways of transferring your Immovable (or) Real Estate Property
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.
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!
I got home loan from Kanchipuram Co-operative Society Bank.Am I eligible for Tax exemption.
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.
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
Dear Gautam,
Part re-payments need not be disclosed in your ITR.
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?
Dear PRATHEESH,
You need to be a co-owner of the property as well to claim tax benefit.
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.
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..
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.
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?
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
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..
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?
Adding to the above question, mother and father own two different flats each. If they are the co-owner of the to-be purchased flat, it would their 2nd property. Whereas, to me (the loan repayer), it is the first one.
Dear Bhargavi,
1 – The Sale proceeds received by your mother, were these from sale of a Land / Residential house?
2 – All three of you can claim tax benefit, provided three of you are co-owners of the newly acquired property and co-borrowers of home loan.
3 – Yes, based on the ownership ration mentioned in the Sale deed. If nothing gets mentioned then it will be considered as proportionately by default.
Kindly read :
* Understanding Tax Implications of Income from House / Property
* Long Term Capital Gain Exemptions on Sale of Property & Recent Court Judgments
* How to save Capital Gains Tax on Sale of Land / House Property?
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.
Dear Ninad,
Is she co-borrower as well?
If yes, both of you can claim tax benefit.
Related articles :
* Understanding Tax Implications of Income from House / Property
* Income Tax Deductions List FY 2018-19 | List of important Income Tax Exemptions for AY 2019-20
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.
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.
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.
Dear Shwetha,
If she becomes a co-owner then she can claim tax benefits from that FY onwards. However, she can not claim the earlier years tax benefits.
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?
Dear Krithiga ..Yes, both of you can individually claim up to Rs 2 Lakh..
Related articles :
Income from house property & tax implications!
List of important Tax deductions FY 2018-19
Hello Sreekanth,
Is this applicable to let out property?
Dear Krithiga ..Yes..
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. “
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.
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.
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.
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.
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
Dear Raju,
Yes it is possible, but you need to inform your banker and get the whole documentation done again!
Kindly read : 5 ways of transferring your real estate property!
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??
No, you can not claim tax benefits..
Thank you Sreekanth
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.
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.
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.
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.
Dear triveni ..As you are not an owner or a co-owner, you can not claim tax benefits on home loan.
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.
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.
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.
Dear Paresh,
If you own two SoP properties, it is mandatory to declare either of the two as ‘Deemed to be let-out property’.
Yes, from FY 2017-18, the maximum loss that can be claimed under the head ‘income from house property’ is Rs 2 Lakh only.
Read:
List of IT deductions for fY 2017-18.
Self-occupied property & tax implications.
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.
Dear Jignesh,
Nothing much we can do about tax rules.
You can claim maximum Rs 2 Lakh and your wife also can claim max Rs 2 Lakh and carry forward the unclaimed loss to next Assessment years.
Read : List of IT exemptions for FY 2017-18.
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.
Dear Vishwas .. If you own two self-occupied properties, it is mandatory to pick any one of them as a Deemed to be Let-out property.
Read : Self-occupied property & tax implications.
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
Dear Uday ..No, you cant claim tax benefits on home loan.
Hi Srikanth
Thanks for response ..
Hope I can claim, If I am registered as co-owner along with my wife. Is it necessary to mention share of property in the sale deed.?
Dear Uday ..If the ratio is not mentioned, can consider it as 50 :50 by default.
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.
Dear Shekhar ..No, as you are not an owner/co-owner of the property, you can not claim tax benefit.
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
Dear Pulkit ..To claim tax benefits one should be both a owner/co-owner and borrower/co-borrower.
You can not claim tax benefits.
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.
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.
Dear Subhash,
1 – It is possible and eligibility criteria may vary from bank to bank.
2 & 3 – Yes, all the borrowers who are co-owners can claim tax benefits on home loan
4 – Kindly check with a banker/any lending institution.
Read:
Budget 17-18, restricts tax benefits on home loan to Rs 2 Lakh only!
I need following clarifications on the home loans
1st Home Loan i claim self occupied which claim interest and principal paid. ( where my parents are staying in a different city)
2nd Home Loan ( myself and my spouse) co own the property and loan is in both of our name,
As per the 2017 budget it has been capped to 2L max interest,
How we can claim the HL interest and principal (where my spouse this is the 1st home loan)
can we claim 2L interest for each of them, accounting the notional rent?
and my spouse can claim the principal portion in 80C?
Dear Sathish,
The principal portion and interest portion can be claimed by both of you, but can not claim separately ie interest by one person and principal portion by another individual.
Kindly read:
Latest income tax deductions for FY 2017-18.
Dear Sreekanth,
I am planning to purchase a property in my spouse’s name to save 2% stamp duty, She is working but currently not under tax bracket. My question is can I take the Income tax benefit on the home loan if I am the co-borrower in the loan but not the co-owner in the property.
Regards
Pankaj
No, you can not claim tax benefits dear Pankaj..
Hi, I and my mother are coowners in a house property (affordable housing). My mother is housewife and have some savings of her own. I am her married daughter and salaried person. I have borrowed the EMI amount so far from my mother and I will be repaying it to her every month (to save interest to banks). Are there any tax benefits in that case? The project is under-construction and expecting completion in 2019 end. My mother has already paid half the amounts and I shall be replaying her the same in period of 5 years.
Kindly suggest what can be done for tax saving?
Dear Madhavi,
Yes, you can claim tax benefits, interest payments u/s 24. No tax benefit on Principal repayments u/s 80c.
The taxpayer should be able to satisfy the assessing officer (if notice is served) how the loan has been utilised for constructing or purchasing a house property.
The interest charged should be reasonable and certificate of interest should be provided by the lender.
Hi Sreekanth,
We own a house with 4 units in Bangalore and we live abroad(citizens of a foreign country). One unit is occupied by the family member and other 3 are given for rent. Since the property is in my husband’s name with no loans, could you please clarify the below.
1. Does my husband has to file the IT returns in his name because he is the sole owner or do I have to file if the money is getting deposited to into my Bank account.
2. Currently the money is getting deposited in regular savings account. Is this ok or do we have to have NRE/NRO account?
3. Since the tenants are giving their personal check to us, do we need to collect any other information
4. I see that there are deduction for property tax and 30% standard deductions. Are there any deduction available for upgrading or maintenance of the property?
5.Also, if one of the tenant pays more than 1.8L/year, what is the process he has to follow for TDS?
6. If I am the co-owner of the property (once my name is added to the deed), do we have to file returns separately or is there an option to file the returns jointly
7. If we file separately/jointly, do we both get exemption of 5L (2.5L/each)
Really appreciate your inputs on the above and thanks in adv.
Aj
Dear AJ,
1 – Your husband has to file the ITR. Kindly read: Do I need to file income tax return? . If the money is getting deposited in your account means we can treat this as Gifts given by your husband. But any income generated on this amount has to be clubbed to your spouse’s income.
Read: Gifts & tax implications.
2 – I believe you need to maintain NRE/NRO accounts.
4 – Maintenance is part of 30% Std deduction.
5 – Kindly go through this article : Rent payable to NRI & TDS rate.
6 – Have to file separately. Rental income can be disclosed by both of you in ITRs based on share of ownership in the property.
7 – Kindly read:
Income from house property & tax implications.
Budget 2017 & important direct tax proposals.
Hi Sreekanth,
1. Me and my brother is having a property which is co owned by us. (2nd property for both of us).
2. Housing loan on above property is in my name and hence i am claiming rebate on interest as let out property.
3. Rental income is getting transferred to my brother and he is paying IT on this.
4. We both are in the IT bracket of 30%.
Is this arrangement not correct? if so, why?
Thanks for your suggestion in advance.
Dear Abhinav,
3 – As the property is jointly owned one, both of you have to declare the rental income in respective ITRs as per the share of ownership.
Thanks Sreekanth. Suppose we are going 5% and 95% sharing respectively for myself and my brother. Now can i still claim rebate on interest on entire amount while showing only 5% as my income. 95% will be shown by my brother and he won’t claim any rebate on interest.
Secondly which is the document for share of ownership?
Thanks,
Abhinav
Dear Abhinav,
Share of ownership is as per your Sale deed. If nothing is mentioned in it, by default you can consider it as 50:50 (equally owned).
Me and My wife has a joint loan (also joint owners) for which annual interest is above 4 lakhs. Can we claim 2 lakhs each in our IT return? While processing the tax for the year my wife’s employer is asking for the rule which talks about this (I have searched for it online, but other than blogs which confirm this rule, I couldn’t find the corresponding circular/act). Can you help?
Dear JOSHY,
Yes, both of you can claim Rs 2 lakh each.
Kindly refer to this IT dept tutorial link, visit pages 19 & 48 (as this is old tutorial the limit was up to Rs 1.5 Lakh, which is now increased to Rs 2 Lakh).
Thanks a lot.
Joshy
SIR
I Have a query regarding interest claim u/s 24 as under:
whether son of deceased father in whose name housing loan was taken earlier, can claim interest on home loan in his Return as he is paying installment of loan also he is the legal heir. but bank is continuing issue interest certificate in the name of deceased father.
pl.0 reply whether it is correct to claim or not
Dear Kapil,
Whether son is a co-borrower on this home loan? Who owns the property? Any other legal heirs?
FATHER WAS THE SOLE OWENER BUT AFTER HIS DEATH HIS SON IS REGULAR IN PAYING INSTALLMENT. AND LOAN ACCOUNT HAS NOT BEEN TRANSFERRED IN SON’S NAME BY BANK .. THUS WHTHER HIS SON CAN CLAIM DEDUCTION AS THE INSTALLEMENT IS DEBITED FROM HIS ACCOUNT. FURTHER HE IN NO CO BORROWER AND NO OTHER LEGAL HEIR EXCEPT MOTHER…
IN MY VIEW SINCE SONS IS REPAYING THE OUTSATNDING HOME HE WOULD BE ELIGIBLE TO CLAIM THE DEDUCTION U/S 24..
PLEASE CLEAR THE ISSUE
Dear KAPIL,
As he is not the borrower, can not claim tax benefits on home loan.
I believe that he can get in touch with the banker and transfer loan on to his name, and then can claim tax benefits.
Also, if mother does not want share in the property, he can get mutation done in his name.
HI,
House property is on my father’s name and House loan is joint(Father and me) . Can i get the tax benefit of it . If not what is the solution ?
Dear Sangameshwar ..As you are not owner/co-owner, you can not claim tax benefits. Your father can Gift you a share in the property and you can claim tax benefits to the extent of ownership share.
Kindly read: 5 ways of transferring your real estate property!
HI Sreekanth Reddy ,
Thanks for the reply.
My father had declared the ‘WILL’ for the house on my name. Can i get the tax benefit of it for house loan.
Is that ‘WILL’ needs to be registered compulsory ?
Thanks,
Sangamesh
Dear Sangameshwar,
No, as you will become the owner of property only after the WILL is executed.
Registration of WILL is not mandatory.
Read:
Nominee Vs Legal Heir : Who will inherit (or) own your Assets? | Importance of WILL
Hello Sir ,
I am playing to buy property of higher amount i.e around 1.3 Cr. Me , my wife and my sister(married but alone) are planning to take a joint loan and all three of us are working . Please let me know is it possible .
Kindly check about the eligibility with any banker/lending institution.
if wife is unaware regarding loans or money from any finance company owned by her husband and unable to pay back can company claim that amount from his wife whenever they residing together but her husband is use to borrow money market without information of her wife . and they are residing together and in house loan they are co-owner but loan is paid only by his wife. the home loan case is entirely different from udhaar occurred by her husband.
kindly tell me know under which law how wife can survive their self and their hard earned money/property from that kind of husband who borrowing loans from market without intimation to their wife.
Dear sarbjit,
Kindly consult a civil lawyer.
Read : Married Women Property Act & Insurance policies.
ME AND MY WIFE PURCHASED A HOME AS CO OWNER AND TAKEN HOME LOAN AS CO BORROWER , WE BOTH ARE SALARIED PERSON BUT EMI IS DEDUCTED FROM MY SALARY ONLY AS EMPLOYER GIVEN ME SUBSIDY ON MY HOME LOAN SO PLEASE GUIDE US WHETHER WE BOTH CAN CLAIM THE INTEREST REBATE UNDER SECTION 24 FOR RS 200000 EACH AS WE ARE PAYING YEARLY INTEREST ON HOUSING LOAN 4,50000
Dear RAKESH..Yes, both of you can claim the tax benefits. Does the home loan statement has both the names?
I wanted to clarify the following
1. Me and my spouse have a co ownership in a property and also claiming 50% rebate in IT, however I am solely repaying the EMI of the same
2. We have recently purchased a new plot, my spouse being sole owner, and for construction of same we have taken joint home loan, which is being paid by him
Kindly clarify, whether he can take full rebate on interest for second home loan and I may take rebate for first home loan as they are being paid respectively
What other option is available.
Dear Ratna,
Yes, you may do so.
But, suggest you to get the EMIs debited from individual bank accounts and also have a ‘self declaration’ done in case of first property, that you are going to claim 100% tax benefits and your spouse is not going to claim them.
Kindly note that, on second property, tax benefits can be claimed only after you get the possession of your house.
1. Me and my wife, both working, have co-ownership in a property and have been claiming rebate in IT since last many years. We claim different percentage every financial year, in proportion to the EMIs paid from our respective bank accounts in that particular year. I hope there is nothing wrong in this arrangement.
2. Now we have got possession of our another co-owned property in Jan 2017. All the EMIs of first home in this financial year are paid by my wife and All the EMIs of second home in this financial year are paid by me.
Kindly clarify what all options are available to us…
Option 1. I take full rebate on Principal & Interest for second home loan and my wife takes full rebate on Principal & Interest for first home loan, the way it has been paid.
Option 2. We add the Principal and Interest for both home loans and take equal benefit after distributing it equally between us.
Option 3. We add the Principal and Interest for both home loans and take benefit in proportion to the amounts paid by us respectively.
Also clarify regarding notional rent, as it is only 2.5 months from Jan 17 to Mar 17 and rental value is almost zero, the area being very far off, less habitable and people won’t prefer staying there on rent as of now.
Dear Kapil,
1 – Ideally the tax benefits have to be claimed based on the share of ownership in the property. Why is it the proportion to the EMIs changing? or is it due to just a change of interest rate?
2 – May I know the share of ownership in the new property?
1. The proportion is changing because I wanted to avail more Tax benefit in some years and I wanted to give more Tax benefit to my wife in other years (Reasons – I didn’t work for few months in an year thereby my tax liability was lesser/ Her salary increased etc. etc.) . I understand that one takes tax benefit in proportion to his/her share of EMIs paid in respective financial year.
2. Ownership should be considered as 50:50 only as we have not defined any other percentages.
Dear Kapil,
1 – I believe this approach may not be right and you may have to justify your viewpoint if asked for, to the It dept.
2 – In such a case, both of you can claim the tax benefits equally.
Thanks for the feedback….Would take care… but my main question remains unanswered…let me reproduce the question in short…
Me and my wife, both working, have already have co-ownership in a property since last many years. Now we have got possession of our another co-owned property in Jan 2017. All the EMIs towards first home loan are paid by my wife in financial year 2016-17 and all the EMIs towards second home loan are paid by me in financial year 2016-17.
Kindly clarify what all options are available to us for FY 2016-17…
Option 1. I take full rebate on Principal & Interest for second home loan and my wife takes full rebate on Principal & Interest for first home loan, the way it has been paid.
Option 2. We add the Principal and Interest for both home loans and take equal benefit after distributing it equally between us since we have 50:50 ownership.
Option 3. We add the Principal and Interest for both home loans and take benefit in proportion to the amounts paid by us respectively.
Also clarify regarding notional rent, as it is only 2.5 months from Jan 17 to Mar 17 and rental value is almost zero, the area being very far off, less habitable and people won’t prefer staying there on rent as of now.
Dear Kapil,
Option 2 looks fine, provided the ownership share is 50:50.
You may consider consulting a CA.
Thanks for your precious time..
1. I want you to advise regarding the notional rent as well… The area is not properly habitable. Can we take the notional rent for 2.5 months after possession as zero???
2. Also, I hope we can claim one fifth of the interest paid during the pre-construction period in this year i.e. FY 2016-17?? If answer is yes, do we need to equally divide that also between me and my wife ??
Dear Kapil,
1 – You may declare it as Let-out property kept vacant, if expected rental income is NIL.
2 – Yes, has to be equally divided. Suggest you to kindly go through this article : Under-construction property & tax implications.
Hi Srikanth,
I am taking a joint home loan with my wife who is house wife. And she will be the co-owner of the new house as well.
I will be paying the complete EMI on this house loan. Can I claim the tax exemption of Principal 3 lakhs(1.5 + 1.5) and Interest 4 lakhs( 2 + 2) by declaring this to my org that my wife is not going to claim the tax exemption ?
Please clarify.
Thanks
-Venkat
Dear Venkat,
The ceiling limit for an individual is Rs 1.5 Lakh u/s 80c and Rs 2 Lakh u/s 24 (for a self-occupied property).
Read: Income from house property & tax benefits on home loan.
Hi srikanth,
Me and my wife both are co-owner as well as co-borrower. EMI is deducted only through my salary . and the bank issued yearly repayment of EMI certificate in joint name Can we both( i and my wife ) claim the housing loan interest rebate as we are paying Rs. 5 Lakh interest yearly .
Yes dear Sameer, both of you can claim the tax benefits.
Hi,
Me and my wife is Co-owner of the property. However the Home Loan is in her name, i was a co-applicant but my salary was not factored while sanctioning the loan. Hence, in repayment EMI certificate my name is not reflecting. Can i claim Tax benefit?
Dear Sandip ..No, only your spouse can claim tax benefits on home loan.
I and my brother have joint house loan with co-owner and coapplicant in property…the total interest payable in year is 2lac and principal is 1lac. can I claim the total interest and principal paid in tax rebate when my brother is not claiming his share for income tax rebate ..
Dear Vipin,
May I know who is paying the EMIs? Is it through a joint bank account?
Dear sir, 1.both me and my mother are govt employees and have a home loan as joint applicants,but my mother is not the co-owner of the property.Can she claim tax benefits ? 2.the loan certificate says “for the purchase of plot and construction”.Is the loan eligible under home loan category for tax benefits ? THANKS.
Dear Vikas,
No, your mother can not claim tax benefits.
Yes, your home loan EMIs can be claimed..
I want to ask First time Home Buyers can claim an additional Tax deduction of up to Rs 50,000 on home loan interest payments u/s 80EE. The below criteria has to be met for claiming tax deduction under section 80EE.
The home loan should have been sanctioned in FY 2016-17.
Loan amount should be less than Rs 35 Lakh.
The value of the house should not be more than Rs 50 Lakh &
The above condition satisfy
The home buyer should not have any other existing residential house in his name.
The home is on name of my mother,father and me. My Father is having home on his name
Am I eligible for claiming extra interest paid over 200000 under 80EE
Dear Vaibhav,
As you are already co-owner of a property, I believe that you are not eligible to claim deduction u/s 80EE.
Dear Sir,
Me and my husband are co owner of a house property (1:1). Loan taken is also in the name of both but full EMI is being paid from my husband bank account.
My Queries are:
1. can my husband claim the full deduction?
2. can wife claim the full deduction?
3. can both claim the deduction?
All queries are separate.
Dear Swati,
1 – Yes. Can submit declaration to employer (if salaried) that spouse is not going to claim tax benefits.
2 – If husband is claiming the full deduction then NO
3 – yes as per the ownership share ratio.
Ownership is Joint, Loan has been taken only in the name of my wife..
Can both claim the benefit or only my wife can claim it…
Dear Pratham..No, only your spouse can claim tax benefits..
Hi Srikanth,
Me and my wife are co-owners of a let out property and I’m the primary borrower in home loan availed for the same property. My wife is a house-wife. Can I claim tax rebate as per Income/Loss calculation of the let out property considering 100% interest on home loan and 0 or 50% of rental income? Home loan EMI is paid completely from my sole account. Thanks.
Dear Uday,
You can claim, you may have to get ‘self-declaration’ from your spouse that she is not going to claim the tax benefit.
Rental income, ideally it has to shown as 50:50 (ownership ratio) when filing income tax returns.
Sir,
1. Are the rules mentioned above applicable for second home. First home is in my name and paying EMI for it. Second home, I am planning to take jointly. Can we have the benefits of 1.5 lakhs principle and 2 lakhs interest deduction, each (effectively 3 lakhs principle and 4 lakhs interest for tax deduction).
2. This second home will be self occupied and first home occupied by parents (though I think that would be considered as let-out legally). Kindly advise.
Dear Mathan,
Yes, if you possess two Self-occupied properties then you have to declare either of the properties as Let-out one.
Yes, both of you can claim up to Rs 1.5 Lakh & 2 Lakh individually for a home loan on self-occupied property.
Kindly read: Income from house property & tax benefits.
Hi Shreekanth,
I & my wife co- own & co-borrow a property which is let out. Last financial year we claimed 50-50% benefits for tax exemptions. This year she is working for only 5 months in this FY due to maternity leave, so total earning is below taxable limit. Can I claim for 100% exemptions for this year & again 50-50% from next year. EMI getting deducted from only my personal savings account. Rent getting deposited to two separate accounts. Please suggest.
Ownership % is not defined, considering by default 50-50%.
Dear Ashish,
I believe that one has to claim the tax benefits as per share of ownership or by default it is 50:50.
But if you would like to change this ratio then you may have to submit a ‘self declaration’ agreement which is done on Stamp paper to your employer, along with provision interest certificate.
Kindly note that you may have to repeat the same thing if you wish to change the ratio again in future.
I have a home loan and a top up loan with a bank where me and my father are co applicants and also the co owners in the property. I want to check if I can apply for a transfer in loan where I want my brother to be co applicant in the loan. I understand my brother needs to be a co owner of the property in that case and want to know how can this be done.
Can we make my brother co owner in the property while our current loan is running?
How do we proceed with if it is possible?
Thanks,
Roshan
Dear Roshan,
Your banker may or many not agree to add your brother as co-borrower & co-owner, so you may kindly first check with your banker/lender.
In case, they agree, you can gift an ownership share in the property.
Kindly read: 5 ways of transferring a real estate property!
Dear Sir,
I have a joint loan with my wife. I wanted to check if it is possible that one applicant can show both principle and interest till the allowed limit and the other shows only the left over intrest component as deducted by the back. Is it mandatory in home loan case that during tax proof submission both principal and intrest has to be shown by both applicant.
Dear Mudit,
Ideally the tax benefits on home loan have to be claimed as per the share of ownership in the property (by default it is 50:50).
me and my mother take combind home loan ….. only one person can take tax benifit or not
Dear virendra ..May I know who owns it? Is it a jointly owned property?
we had borrowed a home loan, where my mother is owner of house. But she is a housewife and do not have any income, so I am the co-application for borrowing the home loan and the loan EMI’s are deducting from my account only.
Am I eligible for income tax benefits. If the loan amount is 6 lakhs then how much tax benefits I can avail ?
Please seuggest sir.
Dear Ravendra,
As you are not co-owner/owner of the said property, you can not claim tax benefits on homeloan.
Kindly read: 5 ways of transferring the ownership title of a Real estate property!
Dear Sir,
We both husbend & wife are co-borrower of SBI House Loan of Rs. 15,00,000. My wife is a Owner of Property and She is Housewife and is not capable to pay EMI. I am paying Full EMI to BANK. I want to avail Full Tax benefit fully . How is it possible ? Kindly help me .
Dear SUBHASISH,
As you are not owner/co-owner of the property, you can not claim tax benefits.
Kindly read:
How to add spouse as co-owner?
5 ways of transferring ownership in real estate property!
Thanks for your response. I want to know which will be perfect for a couple. Gift Deed or
relinquishment deed. Because I am suffering badly monetarily.
Dear SUBHASISH,
Gift deed can be considered if it is a self-occupied property. (if it is a let-out property, kindly note that clubbing of income provision applies and the income is added to your income).
Hallo Sir. thanks for your early response. I am Subhasish Roy. The entire land is gift property and gifted by my father-in-law in favour of my wife. Now tell me to avail entire tax benefit which deed I can submit. Gift Deed or relingquish deed ? Again I am clarifying that I am the payee of entire EMI because my wife is a housewife, but note that both are co-applicant of housing loan
Please sir waiting for your reply.
Dear SUBHASISH,
As mentioned in my previous comment, Gift deed can lead to clubbing of income (if the property is let-out).
Hello Sir,
thanks for the informative article. I have a query though. I am co-applicant with my wife being main applicant in home loan. The house is in name of both of us. The interest certificate generated by bank mentions my wife’s name as main applicant, and my name as co-applicant. So is this sufficient to claim income tax benefit for both of us? My company’s finance person said that I should be a co-borrower in the home loan. So here, am I a co-borrower as well. The EMI is paid from my bank account only.
Please share your views on this.
Thanks,
Yog
Dear Yog ..Yes, it is sufficient and a documentary proof to claim tax benefits on home loan by both of you.
Hi Sreekanth,
Have a couple of queries regarding tax exemption on home loan. Please advice
I intend to take home loan with my father being the co-owner and co-borrower. I will be taking the home loan while my father will be making the downpayment
1. Whether retired personnel can claim home loan tax benefit
2. When being co-borrowers and co-owners, whether ownership share has to be mentioned? Is it mandatory to define share? I mean if not defined, can it be conveniently taken as different share at different times?
3. Can co-borrowers claim tax exemption without giving out ownership share?
4. Can only one co-borrower (say with lesser income) show full rental income and other(with more income) claim tax exemption
Thanks for help.
Thanks,
Anand
Dear Anand,
1 – Yes, is your father a tax assessee?
2 & 3 – Better to define based on the current/expected income levels of joint owners/borrowers. If not, will be considered as 50:50 by default.
4 – Disclosure of Rental income is also based on ownership share in the property.
How to make share agreement for % Ownership between Husband and Wife. ?
What procedure we need to follow ?
One option is ask Bank to cut ECS from two different accounts one is husband’s account and second one is from wife’s account. suppose in the ration of 75%-25%. So if EMI is 2ok , 15k EMI will deduct fro husbands account and 5k from wife’s. Option 1 is possible ?
Any other option to decide and declare % ownership ? so that both can claim tax benefit?
Please advice.
Dear Pragnesh,
Can declare the ownership ratio in Sale deed too.
Option 1 is possible.
Hi!
This query is regarding housing loan, in this case there are 2 real brothers. 1 brother is investing apprx. 33% of cost of property only, for example, house cost is 6o Lakhs, 1 brother is investing 20 Lakhs his own money. Second brother is applying for home loan for Rs. 32 Lakhs, and remaining margin money i.e 8 Lakh he will pay.
In this situation property owner will be both the brothers.
Therefore, can bank sanction housing loan to second brother in such situation?
Dear surendra..Mostly banker will ask both the brothers to be co-borrowers for the home loan.
Hi Srikanth,
We(Myself and Brother) took home loan.Now he is settled down in abroad.I am the only person paying full EMI.
Interest certificate bank mentioned both names.He is not filling for TAX.
Is it possible to get 100% tax exception by claiming myself by stating one declaration letter from my brother ?
Thanks,
Ragav
Dear Ragav,
You can claim.
Suggest you to get ‘self-declaration’ from your bother that he is not going to claim tax benefits and keep it for your future reference.
Also, you may get the EMIs deducted from your individual account.
sir
me and my wife are applicant in the home loan wherein entire EMI is being paid by me as my wife is not working. But the property we have bought is in my wife name only.
can i take the tax rebate out of this property which is in my wife name. also she is not taking any benefit related to income-tax from this property.
Dear Saurabh ..No, you can not claim tax benefits as you are not co-owner/owner of the property.
Sir any way out that i can take the binefit, as my wife is not working so its of no use in future as well
Dear saurabh,
Your wife can relinquish a portion of her ownership share in the property and make you also a co-owner..
Kindly read: 5 ways of transferring real estate property!
Hi Srikanth,
Me and my father has taken a joint home loan. Since my dad is not earning now,what proof i need to submit to avail 100% tax benefit. Should I require any declaration from my dad saying that he is not availing any benefit. If so please let me know the format of that declaration form.
Dear Shinoj,
Yes, you can take the declaration and if required submit it to your employer (if you are a salaried person).
You may request your banker to issue loan statement in your name alone. Also, you may start paying EMIs from your individual Savings account.
I think the question was about the format of the Declaration. Could you please provide a format of the declaration ? Also, declaration is required from whom ? In above case, declaration from father that he is not availing any benefit ? or declaration from Son that he is availing 100% tax benefit ? Request to respond.
Dear Indrajit,
Some employers do collect the declaration form from the Employee itself, stating that no other person (joint borrower) is claiming tax benefits.
However, I have noticed that many employers also ask for declaration form by other co-borrower that he/she is not going to claim the tax benefit.
So, its a matter of compliance and rules followed by the employer.
HI,
Me and my husband both are salaried employees. We are planning to take home loan.. Is co applicant mandatory for getting home loan. If so , what is the eligibility for my husband to be co applicant, will they consider cibil score
Hi,
It is not mandatory. Yes, a decent CIBIL score is a very important criteria to get required home loan.
Hi Sreekanth,
I have one query, me and my wife have taken joint home loan where She is the primary owner and i’m secondary owner of our house. The EMI on the home loan is 46,118 where I pay 31,118 and my wife pays 15,000. The total repayment of principal amount under section 80c for us is 84,756 and total interest payment under section 24 is 4,68,660.Now, I’m little bit confused about how much tax deduction i need to claim under section 80c and under section 24, and how much my wife needs to claim under section 80c and under section 24. Please let us know, looking for your response.
Dear Amit,
Is it a Self-occupied house or a let-out one?
If the ownership ratio has not been mentioned in the Sale deed, both of you can claim the tax benefits in the ratio of 50:50.
Read: Income from house property & tax benefits on homeloan.
Hello Sreekanth,
Property owner is my father. Can me and my brother can take a home loan for which we can take a tax benefit. If me and my brother are the co-applicants of home loan .
Dear Naveen,
Bankers may ask your father also to be a co-borrower of the home loan.
Hello Sreekanth,
Could you please explain tax rebate under section 80EE, if there is joint ownership and joint loan.
If property value is more than 50 Lakh and loan taken is more than 35 Lakh.
Can we claim this rebate?
Looking for your response please.
Dear Brijesh,
In case you’ve purchased a property jointly and have taken a joint home loan, each person repaying the amount would be eligible to claim whole deduction separately.
But, kindly note that below conditions need to be met;
First time Home Buyers can claim an additional Tax deduction of up to Rs 50,000 on home loan interest payments u/s 80EE. The below criteria has to be met for claiming tax deduction under section 80EE.
The home loan should have been sanctioned in FY 2016-17.
Loan amount should be less than Rs 35 Lakh.
The value of the house should not be more than Rs 50 Lakh &
The home buyer should not have any other existing residential house in his name.
Thanks Sreekanth,
But still i am not clear, as per my view loan amount should be break into repay ratio (60:40), means if loan amount is 50 Lac, then for individual it is 30 and 20 Lacs respectively.
Same will be in property value, if property value is 60 Lacs, due to equal ownership, it should be 30 lacs each for claiming deduction.
Is it right? or some other clause is there?
Dear Brijesh,
Yes it is as per the ownership ratio (by default, can consider 50:50).
If interest payment in a FY is Rs 4 lakh, then two co-borrowers can claim Rs 2lakh each u/s 25 as tax deduction.
For 80EE deduction, the rule is as per loan amount and not as per the ownership share.
Hi Sreekanth,
Me & my son had taken a home loan jointly where the Flat taken also owned by both of us. Accordingly the documents are there.Initial two years I have claimed the full tax benefit as my Son earnings were not high.
From this fianicial year ( 2016-17) is it possible to share the IT claim on Interest as well as principle in both of our salary. If so, should we declare the % of share and how the declaration to be made and to be informed to whom all. Pl clarify. Tks
Dear Shan Ji,
Both of you can claim tax benefits in the ratio of 50:50 by default.
Hi sreekanth,
Property owner is my father. Can me and my brother can take a loan for which we can take a tax benifit.
Dear harshith ..Bankers may ask your father also to be a co-applicant for the home loan.
As it is solely owned by your father, both of you can not take tax benefits on home loan.
Hi Sreekanth,
We(me & my brother) have taken a joint home loan, decided to pay home loan jointly. Being my brother as a primary applicant and me as a co-applicant for it. However, EMI is getting deducted from my brothers bank account. Now, can i show ITR’s showing that am also a part of home loan. Please advise.
Dear Shravan..Is it a jointly owned property?
Yes, its a jointly owned property.
Dear shravan..Both of you can claim the tax benefits, but make sure that your banker/lender issues Loan statement in both of your names.
Hello Sir – I have acquired a Joint Home Loan of 30,84,000 from LIC HFL in November 2016 for 15 years of Tenure where my EMI has been decided as 32,000 per month. I am the main applicant and my father is co applicant, both of us are the co-owners of the property & salaried employees. The EMI is deducted from my Bank Account, but me & father have mutually agreed to share the EMIs in a 50:50 ratio. That being said the I will pay the full amount of EMI however my father would return me half of the amount of EMI paid for my own expenses & financial needs every month.
So can both of us claim 100% deduction each u/s 24 loss on house property self occupied- 2 lacs for interest component & u/s 80c – 1.5 lacs principal component for income tax purposes ?
As we both are co-borrowers & co-owners can we both claim total deduction of 4 lacs for interest & 3 lacs for principal in respect to the above statement ? or can the deduction can only be claimed on 50:50 ratio i.e., 1 lac (50% of 2 lacs) for interest & 75k (50% of 1.5 lacs)for principal both of us ? If the deduction ratio is 50:50 can we also split the registration charges in equal ratio while claiming deduction ? or are there any possibilities that only one of us can claim the registration charges in full for getting the maximum benefit as we are not getting 100% deduction each or its better to go with the split .
One last question can I only claim 2 lacs of interest & my father can claim 1.5 lacs for principal or vice versa for the joint home loan or its not possible ?
Your quick response will be of great help! Thanks in advance.
Dear Abdul,
Yes, both of you can claim the tax benefits on home loan.
The threshold limit is per individual basis. If the interest payment on Self-occupied property is say Rs 5 Lakh then each one of you can claim Rs 2 Lakh (total 4 lakh) u/s 24.
Hello sir,
I’m an owner of a flat but my husband has taken loan and is paying for it through our joint account which might take 5-6 years . I’m a central gov employ and he is state gov employ. Now can I get loan with my father and unmarried sister(both working in central gov) for a bungalow.
Dear Brinda,
Some bankers may not approve the loan application if sibling’s name is included..
Hai Sreekanth,
We are constructing a house on a plot owned by my wife. She is working as a consultant and filing IT returns from last 5 years. Since her income is not sufficient for EMI payment, I asked bank to consider me as co-borrower and consider only her current income plus expected rental income to grant loan. Bank says loan will be issued with her as the prime applicant and myself co-applicant. She does not have any house/flat on her name and I have one flat on my name. Is this OK?. Can we claim tax benefits ?
Dear CHANDRA,
That’s ok but as you are not a co-owner of the property, kindly note that you can not claim tax benefits on home loan.
Hi Sreekanth,
I have one query on the home loan tax benefit
My wife is the primary applicant of the home loan and I am co applicant. But she is not working and I am replaying the loan EMI totally 100%
My Office is telling I can not avail 100% tax benefit as I am not primary applicant.
Can you please help me on this. What document I should provide to my office to avail a 100% tax benefit on the interest on EMI I am paying.
Dear SUBRAT,
You may submit a self-declaration done by your spouse that she is not going to claim the tax benefit. Also, you may try requesting your Lender to issue loan statement in your name alone.
Is the property jointly owned one?
Bank refuses to give 60 -40division of home loan statment reply
Dear vinita ..The joint owners or borrowers, have to claim as per the ownership ratio mentioned in the Sale deed (by default it is considered as 50:50).
Dear Sir,
If I avail a home loan from SBI, then processing fee, CERSAI charges etc will be deducted from saving account or loan account. Also insurance premium for property insurance(if I opt one) will be deducted from saving acc or loan acc. Thanks in advance.
Dear Vivek,
You need to pay them through your savings bank account (cash/online/DD mode).
Hello Sir,
I taken a Insurance Policy and paid premium of Rs. 3,05,000.00 PA. My annual income is Rs. 9,00,000.00
so my question is can i take benefit u/s 80 in my ITR as well in my wife’s ITR. She does’t have any investment or saving and her income of Rs. 250,000.00 PA
Dear Jai,
If the policy is in your name and you have paid the premium for it, only you can claim the tax benefit.
Hi Sreekanth,
Myself, father and mother taken housing loan to construct our house..but property is in my mother name. If my mother giving the official proving of will on my name i can claim tax benefit? if my mother is providing will on my name and my sister name i am able to claim tax benefit? or please let me know how to get property ownership document.
Dear Bhuvana,
You need to be an owner or co-owner to claim tax benefits on a home loan.
Your mother can execute Gift Deed and can gift you a share in the property.
Kindly read:
5 ways of transferring your Immovable (or) Real Estate Property
Gifts & Tax implications!
my mother n I have taken a home loan jointly.the only one woner of
our land is my mother but EMI is repaying from my salary account.am i able for tax benefit
Dear Sudipta..If you are not owner/co-owner of the property, you can not claim tax benefits.
Dear Mr. Sreekanth,
I had purchased one flat with my wife jointly (Co-owner: as reflected in society slip & Co-borrower: as reflected in bank IT statement). The EMI is deducted from our joint account also.
Now my question is: (a) Can it be possible to claim principle amount by my wife only (as there is a shortfall in max. tax bracket of Rs. 1.50 Lacs in her case) & interest amount can be claimed by me only (to get the benefit of Rs. 2 Lacs in his tax benefit)? Or in both the cases it will be shared as 50:50? (b) Is there any declaration is required, to state the share as 50:50 or by default it will remains the same? (c) How the 2 different employers will understand our total claim details?
Thanks for your valued guidance in advance. Regards
Dear Mr Das,
a) If the ownership ratio is not mentioned in the Sale deed then the tax benefits have to be claimed as 50 : 50.
c) It is more to do with the IT dept than the employers.
Hi,
I am salaried person with paying income tax with 0 properties on hand.
Now by brother wants to buy a property and wants to add me as co-borrower to get large amount of loan ( he is able to pay the EMI, but he dont have the eligibility). So How i can share my name as co -borrower to get benefit from income tax.
Now Suppose I want to buy my own property to get fully tax benefit, what will happen, on which property do i will get tax benefit? can you provide input on this.
Dear Rakesh,
May I know, if he is able to pay EMI but does not have the eligibility, what does this mean? Is he not filing tax returns?
If you are going to be just co-borrower then you can not claim tax benefits on the property owned by your brother.
If you buy property in your name in future and take loan in your name, you can claim tax benefits.
My father and I took home loan. I am the co-applicant and I pay full EMI every month. But property in my Father’s name. Will I able to claim Tax benefits?
As you are no an owner or co-owner of the property, you can not claim tax benefits.
I and my wife are coborrowers of loan for flat taken on my wife’s name. Emi are deducted from my account . Kindly tell if my wife can take rebate in income tax for this loan.
Dear Harpreet ..She can claim, but suggest you to pay the EMIs from a joint account if not from her individual a/c.
The property is held in the name of my wife and my 2 brothers (employed in private organization and their spouse is house-wife). We have taken a joint home loan in their names and their respective spouse as co-applicants. Whether I can claim Income tax rebate and to what extent and similarly in respect of my brothers also. Expecting your reply
Dear shyam,
All the co-owners of the property who are co-applicants to home loan, can claim the tax benefits in the ratio of their ownership share in the property.
Hi, I took a joint home loan with my mother (i am principal applicant & my mother is co-applicant). My mother is sole owner. 100 % EMI is being deducted from my salary account. Can my mother claim Income tax rebate.
If a joint acc. is opened , my name being first & I transfer money to that acc. & EMI is deducted from that acc., can she then claim tax benefit.
Dear rahul,
As you are not the co-owner of the property you can not claim the tax benefits.
However, joint account can be a better option. She can claim tax benefits (100%) and you may ask your lender to issue Loan statements in her name alone.
Sir, I am planning for a home loan. My gross is 18k, so I want to add my retired Parents. My parents are on pension now. (State govt EE) Both gets an amount of 30k in hand in total as pension. We all will be a co-owner of the property.
So will I be eligible to get a loan if I add my pensioner parents name in loan.
How much maximum loan we are eligible for?
And also please tell me weather We can get tax benefits or not!
How to claim it? And when to claim it?
Dear Himadri,
You can add your parents as co-owners and co-borrowers to the property.
Whether you get the loan amount or not, it depends on the quantum of loan, the total income and other factors as per your lender.
Read: Income from house property & income tax benefits.
I and my brother have taken a home loan for 8 years. And we both are co-owner as well as co-borrower. And EMI is paid through my brother account. And as he have more package/salary than me, thus we have decided that he will claim 100% tax benefit and i will not. My query is that in future if i purchased or take another home loan, can i claim 100% tax benefit on it,on Principal as well as on Interest.
Dear Binod ..Yes, you may do so.
sir.
i and my father has taken joint home loan. I have 35 years of remaining service and my father has 6 years of remaining service. We both are government employees. The entire house registered in the name of my father. The EMI is sharable by both of us equally. Now the question is, shall I claim income tax benefit under Section 24 of Income tax of India act. Kindly clarify.
Dear naresh ..As you are not the owner/co-owner of the property, you can not claim tax benefits on home loan.
Sreekanth sir i am planning to buy a home with my brother. my brother is in Railways and me in a reputed steel ltd. will we get home loan jointly? will we both can get tax deduction? please describe
Dear Sukhdeb ..Loan eligibility can be dependent on many factors. Kindly approach a banker/lender and find out. If both of you are going to be co-owners and co-borrowers then both of you can claim tax benefits.
I am going to buy a property against home loan for which the down-payment is going o be coming from Maternal uncle(Mama). Actually he will be paying 50% of the amount and we all decided to have his name as co-owner of the property but the bank is saying this cannot be done.
Is there any other way legally to include his name the property?
Thanks
Dear Prakash,
Even after making him as co-owner of the property, bank denies giving home loan means then it could be based on the specific bank’s policies and underwriting rules.
You may have to try with some other Lender.
Sir i purchsed one house along with my wife. Both we r working in a central govt. Institution. My doubt is can both of us claim it deductions ? To be fair the entire emi amount is paid by my wife. Because bank is not allowing us for emi deductions from both our accounts separately. Kindly suggest the way. When registered both our names are registered as owner and co owner.
Dear Pradeep,
You may provide joint bank account for EMI deductions.
Yes, both of you can claim the tax benefits as per the ownership share (by default, it is 50:50).
Thank u sir
Hello.. I have one question.
My mother has purchased one property 4 years back and property is only in her name.
Last time i transferred loan to other bank and now loan is in my and my mother name.
I am paying EMI from my Bank Account. Can i claim the tax benefit if will write one sharing agreement even the property is not in my name but loan is in my name. Pls suggest.
Dear Mohit ..If you are not the co-owner or owner of the property, you can not claim tax benefits on home loan.
Read: 5 ways of transferring real estate property!
i am planning to add 3 names in a property – my dad, wife and myself.
I & wife want to take tax benefits and are co-borrowers. While addition of dad names is to keep one more window open for repaying loan. My dad want to repay this loan by selling one of the property in next one year so that proceeds from property will not be taxable.
Please advise –
1. Whether it make sense to add dad name ?
2. Whether dad can repay loan on behalf of us ?
Dear Raju,
1 – Kindly note that the long term capital gains (if any) can be exempted only to the extent of his share of ownership in the new property. Also, the tax benefits has to be claimed in the ratio of Ownership share in the joint property.
2 – Yes. Kindly note that he can gift the sale proceeds generated by the sale of property to you.
Read:
5 ways of transferring Real estate property!
Gifts & Income Tax implications.
My wife and I have jointly taken a home loan. She pays 60 percent of the EMI but property is registered on her name only . What will be our individual tax benefits?
Dear Prateek ..Only she can claim the tax benefits.
As you are not the owner/co-owner of the property, you can not claim tax benefits on home loan though you are a co-borrower.
Can the wife add co owner now? What is the process?
Dear Prateek..Yes, she can gift a share in the property to you. You need to inform your banker too.
Read: 5 ways of transferring your Real estate property!
My son & Wife owns a flat bought on loan and EMI is being discharged by both of them claiming benefits under Sec 80 C and Sec 24. I am now left with2 years of service for retirement and owning two flats which is on rent. Now I want to invest with my son on one property in which the loan will be on both of us. The query is:
1. whether my son can claim Sec 24 benefits on both his property (one already enjoying and new one going to purchase)
2. Since I have 2 years to retire can I also claim under SEC 24 along with my son.
3. Is it is advisable to close my son’s first loan and go for bigger loan amount in the second property.
Please advise.
Regds
R Chandran
Dear Chandran Ji,
1 – If your son is a co-owner and co-borrower for the new property, both of you can claim tax benefits in the ratio of ownership share.
2 – Yes. May be it is advisable to have higher share owned by your Son (w.r.t. tax benefits)
3 – Your choice. Need to work out the calculations and analyze which is the best alternative.
me ( central govt employee)and my wife (staff in nationalisd bank) are planning to take a joint home loan from my wives bank.
being a staff loan the interest rate will be lower then others. in this Case being a co-owner can we both get the tax benefit as per sec 24.. ???
thanks in advnce… 🙂
HI.
I am going to apply for home loan with my husband.
I am applicant and he is coapplicant.
My problem is he dont have form 16 for year 2015. He have it for year 2014 and 2016.
What other alternative is available for this?
Dear Sarika…Banks may ask for Salary slips (Pay slips) or Bank statements.
DEAR SIR,
I HAVE A HOME EQUITY PERSONNEL (TOP-UP ) LOAN FROM STATE BANK OF INDIA , AND THE AMOUNT USED FOR MY HOUSE RENOVATION. IN THE BANK’S WELCOME LETTER CLEARLY MENTIONED THE LOAN SANCTIONED FOR THE PURPOSE WHICH YOU MENTIONED IN YOUR APPLICATION.I WAS WRITTEN IN MY APPLICATION PURPOSE OF LOAN IS HMOE RENOVATION.CAN I GET THE INCOME TAX BENIFITS.
Dear Sudarsan,
You can get tax deduction benefit on the top-up loan if you have receipts/documents to prove that the loan taken has been used for acquisition /construction /repair/ renovation of a residential property. The tax benefit is available only on the interest portion of the loan under section 24.
Read : Top up loans..
FROM,
THANKS FOR YOUR REPLY SIR, ONE MORE THING IF I I HAVE ONE HOME IN GUJARAT AND OTHER ONE IN KERALA IN MY NATIVE PLACE . THAT WAS CONSTRUCTED WITH THE MONEY WHICH WAS TAKEN FROM AHMEDABAD . MY AHMEDABAD HOUSE MORTGUAGED FOR HOME EQUITY . MAY GET THE THE CONSIDERATION OF SEC. 24
Hi Sreekanth,
I have a flat jointly owned by my Wife and even we both are joint borrowers of home loan from Bank. Until now (almost 2 yrs), EMIs have been going out from my account only (Single ECS mandate from my Bank account). My question is – Can we both still claim tax benefit (Sec 80C & Sec 24)as she is employed too? Also, can we have different ratio of claim (say 70 – 30 or 60-40)? Or is it required by law to have the EMIs to be paid from respective bank accounts in that ratio too?
Please advise.
Manish
Dear Manish,
Henceforth, if both of you would like to claim tax benefits, suggest you to pay the EMIs from a Joint account.
Ideally the tax benefits have to be claimed in the ratio of ownership share in the property (by default its 50:50).
Hi sreekanth,
I have bought property with my mother but get my loan approved on my name only, so if my mother is co-owner, is it mandate to have loan on her name also
Dear Anoop ..Is the property solely owned by your mother?
No, it is not mandatory.
If you are not the co-owner of the property then you can not claim tax benefits on home loan EMI payments.
Hi Sreekanth,
My brother and I are a co-owners of a house and we want to claim tax benefit, for this I was advised to sign a self declaration with % share of each,
My question is , is there a specific format for this self declaration, if so, could you please provide me with the same?
Regards,
Ramakanth
Dear Ramakanth,
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
Thanks for the format Sreekanth,
Just want to be sure, don’t we need to mention the percentage % of share for my Brother and I explicitly in the declaration, only just the calculated amount that I am claiming to be mentioned and no need of %ages? Please confirm.
Regards,
Ramakanth
Dear Ramakanth,
The above one is just a format and not a standard one. You may add/edit the sentences as per your requirement.
Makes sense, thanks for your valuable comments.
Hi Sreekanth, I as a applicant and my wife (House wife-Not earning) as a co-applicant in home loan. and the same here in property ownership. Also i am paying all the EMI’s. Now please let me know can i take 100% rebate in TAX both on principle and interest and also on 80EE. This is our first property and property value is below then 30L and loan is below the 25L.
Appreciate for your quick response in advance.
Dear Karmveer ..Yes, you can claim 100% tax benefits. Also, you can request your lender to issue the Loan statements in your name alone. (I am assuming that the EMIs are being deducted from your individual Bank account).
Thanks for your quick response.
Now i have one problem. I was little confused.
I as a applicant and my wife (House wife-Not earning) as a co-applicant in home loan. BUT OWNER OF PROPERTY IS MY WIFE ONLY. i am paying all the EMI’s. Now please let me know can i take 100% rebate in TAX both on principle and interest and also on 80EE. This is our first property and property value is below then 30L and loan is below the 25L.
This is because i just buy this property.
If not please give me some solution.
Appreciate for your quick response in advance.
Dear Karmveer ..If the property is solely owned by your wife then you can not claim tax benefits on home loan even though you are a co-borrower on home loan.
You have to be either owner or joint-owner to claim tax deductions.
Kindly read: 5 ways of transferring real estate property!
Hi Sir,
We having 3 applicants of SBI home loan, 1st Applicant will be Father & 2nd 3rd Will be Husband & Wife.
Is there any possible ways to register the property in the name of 2nd & 3rd Applicant, we need not to register in the name of 1st Applicant.
Please advice the possible ways.
Thanks,
Dear Shivraj ..Yes, it is not required or necessary that all the co-borrowers to be the co-owners of the property.
Read: 5 ways of transferring the real estate property!
Hello sir
Me and my wife having joint home loan. And she is the primary applicant. All the EMI is debiting from her account so my question is as a joint loan applicant can we both claim 50:50 to claim tax banefit. If not than what we need to do that we both able to claim 50% each.
Thnx in advance
Dear Divyraj ..Is it jointly owned property?
Hi,
My mother owns a site and she is a house wife. I am the married daughter and co-applicant for loan amount and not co-owner. I am salaried employee. I came to know i cannot claim income tax benefit if not a co-owner. Now can i make the 50% of property in my name and claim the income tax benefit.
Dear prathibha,
Yes.
Kindly read: 5 ways of transferring a real estate property!
thanks , the advice was really helpful.
Hi,
I already have a home loan of 18 lacs (2014) for 15 years for a 2bhk flat in my hometown on solely my name which is self-occupied and my parents are living there.
Post Marriage me and my husband has booked another flat 2bhk in Hyderabad and wish to take Home Loan from other bank of around 40 lacs. Below are my questions:
1. Can I take second home loan as joint owner and applicant along with my husband?
2. If answer to Q1 is Yes then is it ideal and worth taking joint together. What would be the benefits?
3. We both are working and expecting good salary increase every year. Is it advisable to finish off one loan by repayment ? What should be the strategy to take best benefit for tax as well as to reduce interest amount overall.(like finishing loan with lesser tenure?)
4. If we plan as joint applicant which ratio we can divide the EMI amount paid for a year? 1:3 ?
Regards,
Janhavi
Dear Janhavi,
1 – Yes.
2 – Can be higher loan eligibility & both of you can claim tax benefits.
3 – Have you planned for other high priority goals like Retirement etc. ?
4 – Depends on your current / future expected income/earnings.
Thanks Sreekanth.
Reply to 3. No. We havent Planned any specific Insurance or retirement policy . But we add PPF amount every year for both of us and some SIPs around 10k per month.
Q 5 – Another question i have is:
I read somewhere as below
“You have to pay wealth tax on one of your house. As per Wealth tax Act only one house is exempt from Wealth Tax. You have to pay tax on one of the house of your choice but you can deduct loan amount against the house for which you taken loan while calculating taxable wealth. ”
I didn’t understand exactly what it means ?
Dear Janhavi,
Kindly plan your insurance requirement and for high-priority goals like Retirement before pre-paying your home loan(s).
Read:
Retirement planning in 3 simple steps.
If life is UNPREDICTABLE, insurance can’t be optional.
6 Common Personal Finance Mistakes..!
List of articles on key aspects of Personal Financial Planning!
Kindly note that ‘Budget 2015 announced that the levy of Wealth Tax has now been completely removed from Financial Year 2015-16 onwards.’
Thanks for additional links suggested.
I have a query related to which kind of EMI we should go for We have some 60 lacs to be paid for complete purchase. Looking for 45 lacs home loan with OD Account facility. But as the property will take minimum June 2019 for possession (+ 6 months grace period) whether we should go for pre EMI or Full EMI. What are their pros and cons
Other query is after possesion we will be able to claim tax benefit for interest paid in pre construction phase in 1/5 installment for next 5 years. what about the principle amount paid?
Also in case we plan for repayment of some amount every coming 3 years will that amount be used for tax benefit in 2020 financial year?
We have some lumpsum saving of 6-7 lacs is it better to pay one installment to builder and then take loan or keep it in OD account for Home loan
Its very confusing which option to go for.
Required suggestion asap
Dear Janhavi,
As you are expecting to get the possession in 2019, may be it is wiser to opt for Pre-EMI option.
You may invest the savings in other high priority goals as well.
Kindly note that any principal re-payment paid during the Pre-EMI period is not deductible u/s 80C.
Read:
Under construction property & tax implications.
Read this very useful article..click here..
Hi sir,
I have planned to buy a flat pricing around 30 lakhs. My net salary is around 23000 pm. What is the amount of Housing loan which can i get. My father’s pension income is around 11000 pm. Can we both jointly apply for Housing loan. What is the amount of loan and emi which we get. What are the conditions? Please help me sir.
Dear Srinivas ..Yes, both of you can apply for housing loan. Regarding eligibility rules, kindly visit any bank or you may use online EMI loan eligibility calculators which are available on Banks’ websites.
Hi, I bought a house on my wife name. But I got home loan on my wife name and my name. I am paying the EMI. I am only working and my wife is house wife. Shall I claim the tax for the EMI i am paying? If I want to get the tax benefit what i need to do. The original documents are with SBI bank now.
Dear vinoth ..You need to be the owner or co-owner of the property to claim tax benefits.
Hi Sir,
thanks for the reply. So you mean to say I need to again transfer the property to my name from my wife name. The Original doc is now with SBI bank. Is there any easy way to do this and claim the tax for the EMI which I am paying from my salary.
Thanks,
Vinoth. M
Dear Vinoth ..You can inform this to your banker and you can then be a joint-owner of the property.
I live with my mother and father. A plot is owned by my mother, who is a housewife. I applied for home loan,which was granted by the bank with the name of my mother as co-borrower. EMI and interest is getting debited from my bank account as mother is a house wife and no source of income. Can I avail Tax rebate?
Dear Arun ..As you are not owner/co-owner of the property, you can not claim tax benefits on home loan.
Sir, Is there any other remedy available to avail the tax benefit as the land is mortgaged with the bank and the ownership cannot be transferred. If yes , please help me out.
I have already taken a home loan 6 years back and enjoying the tax benefit.
Now one more property loan am taking along with my wife.
Whether I will be eligible to get tax benefit for both the home loan.
Dear AADARSH ..Yes, to the extent of your ownership share in the new property.
Hi, I am a co-owner and co-applicant for a property with my father. Can I be the co-owner of anathor property with my wife with the one is already exists and loan is going on.
Dear tushar ..Why not?? Yes, you can be..
Hi
My father and me are Co- applicants and Co- owner in home loan with my mother. EMI Is deducted from my father’s bank a/c only.
Can I claim the tax benefit of repayment of loan although no EMI is deducted from my bank a/c.
Dear Rohit ..If your father is paying all EMIs and if you are not one of the co-owners of the property then you can not claim tax benefits.
Hi my mother and i took a joint home loan, but my mother is the only owner, as i am not the co owner i can’t avail tax benefit, as of now my mother is paying all the instalments, i want my mother to get complete tax benefit of 2 lakhs, what should i do. thanks in advance.
Dear Nishant ..As she is the sole owner of the property, she can very well claim the entire tax benefits. She can claim up to Rs 2 Lakh u/s 24 when filing her income tax return.
Read: Income from house property calculation..
Hi Sir,
I am planning to take home loan from SBI where the interest rate for women is about 9.30 ℅ whereas it is 9.35 ℅ for other i.e. me.
1) In that case if i make my wife as a co.borrower of loan and co- owner of property (she is also earning lady)for taking home loan ,what the interest rate should I have to pay
2) 9.35 interest rate of sbi is floating interest rate or is it fixed?
please reply.
Dear Sacharaj,
Woman should be the sole applicant or one of the co-applicants for Home Loan to get priority rate. Also, the woman borrower should be the sole owner or one of the co-owners of the property proposed to be financed by the Bank.
So, joint home loan is accepted.
It’s floating rate.
Read : MCLR – new lending rate system.
Hi Sreekanth,
I would like to take joint home loan on a property. Would it be possible to get a joint loan along with my co-brother(Sister-in-law’s husband). We would be co owners of the property.
Many thanks in advance..
Dear Surendranath ..On whose name the property is? Co-owners can be any one.
Hi Shreekanth,
My mother -in- law and brother-in-law purchased a flat. While purchasing 40k was paid by my mother-in-law and rest 22k was paid by my brother-in-law taking a loan from bank. The entire flat is on my brother-in-law name and he said that since he is taking loan that’s why it is mandatory for him to take flat on his name only.
My query is that is it true that my mother-in-law’s name couldn’t come in the property as she is a housewife and not a co-applicant. Can she not be the co-owner of the flat.
Sorry for sending such a big query. Thank you in advance.
Dear Shaikh,
Just because your brother in law has taken a loan for partially funding the purchase of proprety, that does not mean that he can be the sole owner of that property. If your Mother in law has also contributed, she can be a co-owner of the property. The ratio of ownership has to be decided mutually.
You can get your MIL name included in the Sale deed by executing ‘Rectification deed’ or through Gift deed (your BIL has to execute gift deed).
Appreciate your quick revert. Thank you so much it was really helpful.
Best Regards
Dear sir,
husband and wife co-owner of the property equally. wife taken housing loan Rs.500000/- , she is house wife. please suggest husband can take income tax deduction 100% of principle and interest.
Thanks and regards
P.Ganapathi
Dear Ganapathi
Are EMIs being deducted from your individual account? And if you are paying 100% of EMIs, you can claim entire tax benefits.
Hi,
For this financial year my home loan transferred into my wife Govt. Staf housing loan. can i take he 100% tax benefit as my loan amount deducted from wife salary.Can I avail the tax benefit for the home loan(since I’m co-owner of the property), she don’t want to claim the same.
Dear Virat,
If she is paying the entire EMIs then she can only claim the tax benefits.
Since wife was not earning , husband is claiming 100% home loan benefits where wife is a equal co owner and co borrower. Now wife’s income is more. Can wife claim 100% benefit?
Dear Sunil ..If both are contributing to EMIs, then ideally the claims have to be made according to their ownership share.
Hi Sreekanth, I have a second house on which I have taken a bank loan. The ownership in the second house is in the ratio of 50% each with my wife. The second house has been let out. My wife is also working but she does not fall in the income tax range after investments under 80C. My query is: Can I claim the rebate on whole interest as despite the fact that my wife is also holding 50% share in the house?
Dear Anil ..How are the EMIs been paid? Do you pay the EMIs from joint account ?
Hi Srikant,
In the month of October 15 I purchased a plot in name of my wife and then took a loan for construction.
She is 100% owner of plot although while purchase and construction complete payment is done through my account. She is a house wife and till date never filed any return.
Am I eligible for tax rebate?
Dear Mukesh ..As you are not the owner/co-owner of the property, you can not claim tax benefits on the home loan.
So now what are the options available for me? I am the co-borrower, loan emi is deducted from my salary account and she is a house wife. If we make a gift deed of 50-50 then is it ok?
Dear Mukesh ..Yes, in that scenario you can claim 50% of tax benefit (as per your share in the Property).
My query is a repetitive one. We have purchased a property in my mother’s name. I have been paying the EMIs. My name is not in the sale Deed. Reading your previous replies, I cannot get tax benefit. However, any possibility of getting the same in future. Any was I can add my name in the ownership other than by a new sale deed.
Dear Tushar,
You mother can execute a Gift deed (for 100% share or for a portion of property), so that you can become a co-owner or owner of the said property.
Dear Sreekanth
My wife and i have brought a house in 2011 with a loan . she is owner of the house and i am co -applicant on the loan.
she has been paying the emi and claiming the tax exception .now that she has resigned from job 10months. i have been paying the loan emi for it. how can i claiming tax exception for the same.
Dear Rajeevkumar ..If you are not the owner/co-owner of the property then you can not claim tax benefits though you pay the EMIs.
Hi,
I am the owner and my wife is co-applicant.We have 50:50 share of property, however I pay the complete EMI so as per the example in FAQ I am allowed to claim the tax benefit of the entire interest amount paid.With this in place can my wife claim the 100% principal amount (due to other investments I have already exhausted the 1.5 Lakh threshold), so is it possible that I am claiming 100% Interest paid and my wife claiming 100% Principal paid.
Dear,
I believe that she can claim other investments (not homeloan) as she is not contributing to EMI payments.
Hi,
There are some websites which advise that entire home loan tax saving benefit can be taken by the person paying entire EMI. It seems, this advice is different from your opinion.
There can be a major difference in ownership cost and home loan. i.e. House cost can be 2 crores and home loan can be of only 50 lakhs. Income tax benefit is given only for the EMI or home loan repayment to the bank. One of the co owner can contribute as lump sum amount but may not have earning to provide EMI. Other co owner does not have lump sum amount but has earnings to provide EMI.
In case of self occupied property both owners can independently avail benefits.
The maximum benefit availed is limited to 15 lakhs for let out property. The actual benefit availed may be much less based on EMI paid.
With reference to above in case of let out property :
Is it possible for one co owner to claim entire benefits for the amount of emi paid by him.This may be upto 100% of the actual EMI paid to the bank?
Is there a specific clause in Income tax act which prohibits one co owner to claim entire tax benefit in case of let out property ?
The FAQ does address single co owner taking tax benefit. Trust it is for let out property.
Another query is how to treat rental income of let out property in case one co owner is claiming tax benefits.
Regards
Dear Navin,
The rental income has to be shared as per the ownership ratio.
Hi,
My husband is owner and I am co-owner of a flat(We are residing in).
We have 50:50 share of property.
But my salary is less as compared to his.
Can we avail tax exemption in 60:40 ratio?
Thank you
Dear prajakta,
Ideally the tax benefits have to be claimed as per the ownership ratio given in the Sale deed.
Hi,
We bought a under construction flat on my Wife’s name and myself as the co-owner. We took home loan on my wife’s name as she is a bank employee and had few benefits for staff housing loan. Now I have following queries.
1. Can I avail the tax benefit for the home loan(since I’m co-owner of the property) by providing any letter/undertaking that my wife is not claiming tax exception for the same.
2. Is it possible to claim tax exception for an under construction flat. Note: We have started re-paying our full emi for the loan and it currently deducted from my wife’s account.
Thanks,
Veera
Dear Veera,
1 – No (you are not co-applicant for the loan).
2 – Kindly read: Under-construction property & Income tax implications.
Hi Sreekanth,
Can I get your phone number I have some question on my home loan which is joint applicants. Brother, Myself and dad as co-applicants.
Dear Raphael,
I do not like to share my contact number in Public Forum. Apologies.
I and my father have availed a home loan of Rs.50Lacs. Property is also owned by both of us (50:50). But EMI and interest is getting debited from my father’s bank account. In that case am I eligible for claiming income tax exemption? If eligible what is the ratio of the eligibility.
Dear Ani,
As you are the joint owner of the property you can claim the tax benefits (50: 50 ratio).
But suggest you to get the EMIs deducted from a joint bank account and also request the banker to issue the loan statements in both the names.
Hi,
My Father owns a house and we are planning to make some renovation. I’m not the co-owner of the house and planning to take loan on my name for renovation as he is a retried govt employee.
1. If I can get the loan on my name and father as co-borrower, Can I avail the tax benefit, tough i’m not the owner of the property.
2. If I can’t avail tax benefit, then what are the other options available for me getting it.
Thanks,
Veera
Dear Veera,
1 – No.
2 – You have to co-own the property to claim income tax benefits.
Also, kindly note that you can claim only Rs.30,000 as tax deduction if home loan is for house renovation.
Hi,
Your answers are very facinating…….
I purchased a 1 bhk in the year 2003 before marriage. However loan was paid off in the year 2008 post marriage but only by me.
I have purchased a new 2bhk. My wife is the 1st owner and I am the 2nd owner. We both contributed towards the house maybe I shared more. Due to circumstances my wife left the job in the year 2011 and I repaid the loan in the year 2015.
2 bhk is occupied by us. 1 bhk is on rent and comes in my account.
Question 1 – Can I give the POA to my wife for the house on rent and let the rent amt be transfered to my wife’s bank a/c . she is not working and show this as an income
Question 2 – How do I save on the tax
Dear Stanley,
1 – As she is also a co-owner of the property, both of you have to share the rental income as per the ownership ratio.
2 – You may gift your share in the property to her.
If I gift my share to her. She will have to pay the taxes. In this case since it will be below 1 lacs then the taxes would be nil. Please confirm if my undestanding is correct.
Dear stanley ..If rental income is below basic exemption limit then, no taxes liability.
To gift my share of the rent and other amount to my wife. Should there be a bank transaction or even cash transaction is considered.
Also should this agreement be registered or just a blank paper would do with both of our signatures…
Dear stanley,
Gift here is referred to ‘ownership share’ and not rental income.
If you gift rental income, any income generated on this is again clubbed to your income.
Read: Gifts & income tax implications.
Dear Sreekanth,
My cousin and me want to buy a property as joint owners. My cousins wife is also working and he wants to include her as co applicant. And I would also like to take home loan on the my share of the property.
Would it be possible for my cousin to include his wife as co applicant and get higher loan?
Thanks..
Dear Surendranath..Yes, it can be possible.
Hi Sreekanth,
It was nice article. I have one doubt on rental income and taxation of second home loan.
We recently bought the second house jointly (Me + my mother).
since My mother is housewife and don’t have Income I want to give the rental income on new home to her.
At the same time I am the one who pay the EMI on the same can I claim the 100% interest on the home loan and 0 Rental Income.
Thanks in advance,
Regards,
SRinivas Srikanth V
Dear Srinivas,
Rental income has to be shared as per the onwership share.
Ideally it is the same case with tax benefits.
However, if the entire EMIs are being paid by you, you can ask your banker/lender to issue loan statement in your name only.
Also, you can have one agreement done between both of you and you mother can provide a ‘self-declaration’ stating that she would not be claiming tax benefits .
Hi,
I have taken home loan with my wife as co-borrower. We have shifted in this home. Wife is also working and pays income tax. Property is also co-owned. Share percentage is not defined hence its 50:50 as evident from your article. EMI goes from my account.
We have another co-owned house which is rented. no loans against this. Rental income comes to wife’s account.
My questions are:
a. Is home loan interest advantage is to be taken in 50:50 ratio or it can be any other. Say if total interest is paid around 2.5L can I avail 2L and wife 0.5L?
b. Can the rental income shown fully by my wife? (she is in lower income bracket)
c. If yes, will it create issue in income tax return form 2A where percentage of ownership is to be mentioned.
Thanks.
Dear Vishal,
a – Ideally it is as per the ownership share ratio. Also, if both of you would like to claim tax benefits, it is better if the EMIs go through a Joint Account. Both of you can enter into an Agreement regarding the ratio of EMI contributions. You may also ask your Lender to issue the loan statement accordingly.
b – Rental income has to be shared as per the ownership share ratio.
My mother is 75 years old. She has a plot in her name. Can I apply for a home loan without being a co owner? Just as a co applicant. I don’t need any it benefits.
Dear Nagaraju..Yes, you can but banker/lender may insist that your mother to be a co-borrower/co-applicant to home loan.
Dear Sreekanth,
Firstly thank you for helping out those in need of advice. I have 2 minor questions
1) Can I claim municipal tax arrears paid as deduction in current year? Basically I had not paid my municipal tax for previous years and now have paid a lump sum.
2) If one of the co-owners of the property pays the entire municipal tax, can that person claim entire benefit? Or would this have to be apportioned in the same ratio of the ownership of property?
Thanks and Regards,
Pawan
Dear Pawan,
1 – Municipal Taxes paid (Current / Advance / Arrear) can be deducted.
2 – I believe that it has to be apportioned as per the ownership share in the property.
Sir,
I and my father are the co owners of a flat. We have taken joint home loan from HDFC and pays the EMI in the ratio of 38:62 from two different bank accounts (one from my account and the other from my father’s account) . Please confirm that if the income tax benefit will be availed in the same ratio we pay the EMI or there is any way that we can avail it in 50:50 ratio.
Sir,
Basically its me, my father and my mother are the co owners of the flat and the ownership share is shared equally among three of us (i.e. 33.33% each) but my mother is housewife and have no source of income. The loan emi is paid between me and my father in the ratio of 38:62 as mentioned above. Please let us know if we can avail the tax benefit in 50:50 ratio.
Dear Tanumon,
Both of you can avail the tax benefits in the ratio of 38:62. Kindly make sure that your banker issues loan statement accordingly. Else you may opt to pay from a joint-account.
Sir,
Is there any way that we both can avail the tax benefit in 50:50 ratio?
Dear Tanumon..May be your mother can gift her share.
Hi,
I have a property in Bangalore which is on joint name of me and my wife. Now can I let out the property with her as the person who executes the agreement, there in receiving the rental income? And since am paying the home loan, I would like to claim the interest for the housing loan. Is it fine that way? I do not want to show the rental income as additional income in my name.
Dear Prabhu,
As both of you are the co-owners of the property, I believe that the rental income has to shared by both of you for income tax purposes.
My son want to buy a house for 60 lakh . In house loan I am a co application with my son . House will be registered in my son name only .
My question are
what care we have to take in case of income tax
who has to pay 1% TDS as property is more then 50 Lakh
Dear RAJIv Ji,
Your son has to pay the 1% TDS on the transaction.
Kindly note that you can not claim income tax benefits (if you would like to..) as you are not the co-owner of the property.
I HAVE TAKEN FLAT ON MY WIFE’S NAME….. BUT THAT HOUSING LOAN IS ON BOTH THE NAMES INFECT I AM THE MAIN APPLICANT
SO MY QUESTION IS , CAN I CLAIM FOR IT BENEFIT…????
Dear KAILAS ..You have to be a co-owner of the property to claim tax benefits.
sir we are two brother and want to construct house on the plot which is in the father name.My father is retired and we are Govt.officers. Loan for construction shall be taken by us(brother). How can we avail tax benefits on the loan.
Dear praveen..Kindly note that you (brothers) have to be the co-owners of the property to claim tax benefits on home loan.
I with my brother going to have a resale house….
1/it cost 30 lakhs
2/both of us thinkIng of getting loan of 15 lakhs each
3/both of us have net pay pee month is 19000.
4/can we avail loan for the same property
5/sbi would allow or both would prefer different banks
Dear Sarat ..Kindly check with SBI about your (both) loan eligibility.
hello sir,
i have purchased a house in which me & my wife is joint owners. i have taken a home loan from bank for the same in which we are the co applicants. i am paying monthly whole EMI from my individual salary account. my wife is not working anywhere. the same property has been rented out.
so, how the tax benefit i will get.
(1) 50:50 rental income will be shared by both of us.
(2) i can claim full interest repayment.
(3) or whole rental income will be included in my taxable income.
please share your valuable comments at the earliest.
Dear suminder,
Ideally as per the ownership ratio (if not mentioned then 50:50).
1 – But as the entire EMIs are paid by you from your single account, you can claim total tax benefits.
2 – If it is a Let-out property.
3 – 50:50 as it is a joint property.
Hello Sreekanth,
My Father is a farmer and has the house property in his name. We plan to construct the House by taking Home Loan. I am not an co-owner/owner of the house property. Below are my Queries:
1) To avail the Tax benefits for myself, this has to be shown as Gift deed, Could you brief us about the Gift Deed procedures and the Stamp duty part of it please?
2.Gift Deed Procedure: if it is a 60*40 site, My father has to gift 30*40 measurment site on my name. this i need to registration as seperate document with boundaries by paying 5-6% cgarges? or jsut in stamp paper it can be mentioned that some share has been gifted? please clarify
Dear Murali,
1 – Stamp duty varies from state to state. You can get more information on respective State gov revenue department website.
2 – He may do it either way. He can mention that 50% of the property (ownership share) is gifted to you. Kindly take help of a lawyer or good Real estate consultant.
Hi,
Recently, my father took a joint home loan but mistakenly he didn’t inquired much and signed me up as co-borrower(the property is in the name of my father and mother). As a result of it, i am not able to take the tax benefit.
Can you please suggest if something can be done w.r.t current scenario…
Thanks,
Priyadarshee
Dear Rishi,
Your parents can gift a portion (share of ownership) of property to you and accordingly you can claim tax benefits.
Sir my wife & I HV taken 35 lakhs loan in joint name & property is also in joint name. In this loan 12 lakhs is my wife cadre loan for which Pricipal & into is being deducted from her salary and rest is being deducted from my bank account. Both loan account opened for cadre loan & other have joint name. Now my wife office cadre loan has increased. Now lichfl has offered us that due to less interest rate my wife may pay whole instalment from her salary account. But loan account will remain in joint name. My question is can I still claim tax benefit by paying cheque of my share to my wife. If so under which section of IT ACT. & HOW pl guide me. PL TREAT IT MOST URGENT
Dear Kamal,
The ratio of tax benefits is dependent on the ratio of ownership share.
In case if your spouse wants to claim higher ratio as tax benefit, suggest both of you to enter into a simple agreement that she will be claiming higher % of EMIs as tax benefits and the same will be deducted from the joint account. You may ask your lender to issue loan statements accordingly.
Sir my wife and I would like to claim 50% &. 50% tax benefit. But here question is when whole loan amount would be directly deducted from my wife salary account. If so happen then can I claim tax benefit being co-borwwer and joint & equal share holder of flat. If yes, how under which section. Can to claim tax benefit I can pay my share cheque regularly to my wife. Would it be legally right. Please. Do inform in detail
Dear Kamal,
To claim tax benefits in the ratio of 50:50 then it is better you do it from a joint account. If total amount is paid by your spouse from her individual account then your lender may issue loan statements only in her name, you may then not be able to claim tax benefits.
But sir if lander issue certificate in joint name than how can i claim tax benefit. That is when whole amount of loan i.e pricipal & intt. Would be deducted from my wife’s salary. Can i enter into an agreement with her and pay my share cheque before loan dedution date of each month. Pl. Pl. Pl. Guide me sir. Pl. Read my queries and hope u will guide me.
Dear Kamal..Suggest you to take help of a CA.
Dear Sir,
I wanna know that, my wife has joined as a banker and completed one year of service, moreover this is her first job. Is she eligible to be a co borrower with me in taking a house building loan. And will her salary be also included in calculating the eligible loan amount ?
Thanking you,
Dear Arup..Yes, why not!
Sir,
My wife and I are co-borrowers of a housing loan. The property is in her name. I am also a owner of a property. Will I be eligible for tax deduction as a co-borrower for her property.
Thanks
Dear Vivek..Yes you too can claim tax benefits to the extent of your ownership share in the property.
Sir,
Just a clarification. I do not own the said property. I am only a co-borrower. Now the question is will I be eligible for any tax benefit. Appreciate your prompt responses.
Dear Vivek..No.
Thank-you Sir.
Hi Sreekanth,
I am planning for a home loan, to avail tax exemption what should be the minimum amount for home loan.
5 lakhs, 10 lakhs…..
Dear Makhdoom..Depends on your requirements..to avail tax exemption there is no such min limit..
Hi Sreekanth,
I have bought a flat on a joint name (with my wife) and also I am co borrower of the loan , and no where on the house documents the % of share is mentioned. And now the loan is completely deducting from my wive’s account. In this case can only my wife alone claim the complete IT exemption for housing loan and I want to claim HRA? Is this possible?
I appreciate your quick response:)
Regards,
Srinivas N
Dear Srinivas,
As you are living in a self-occupied (assuming) house you can not claim HRA.
Ideally both of you can claim tax benefits in the ratio of 50:50.
Is the loan statement issued by your banker has only her name? If so, suggest you to get the EMIs deducted from two different individual accounts or a joint account and make sure your name is also there in the loan statements.
Hi Sreekanth,
Myself and my wife have taken a joint home loan in which we are co-borrowers and also co-owners. I have read in many blogs that in case of joint home loan both husband and wife can claim the entire tax benefits individually i.e., 1. 5 lakhs on principle and 2 lakhs on interest which means together we can claim upto 7 lakhs. Is it true?
Also there is no mention of property share in the documents so can it be assumed to be 50:50 share or can we mutually decide on 60:40 share and pay accordingly?
Dear Rajesh..The percentage of tax benefits that can be claimed is based on the ratio of ownership, as pointed out rightly by you. If you are planning for 60:40 ratio, suggest you to make a simple agreement between yourselves and also inform your banker to issue the loan statements accordingly. But, ideally you have to include this ratio in your sale deed.
Thank you Sreekanth for the replay. Also what about the tax benefits? Can we both claim upto 7 lakhs?
Dear Rajesh..Yes, if you have EMIs to that extent.
First i want to thanks to u for doing great job by helping people.
My Question:– Is 5 to 10 % ownership in property(home) enough to claim tax benefit ?
Background:-
We brought a old house in april-2016 with co-applicants (co-borrower) of my mother and two brothers in home loan but registration of property is in name of my mother’s only & we three brothers are paying EMI. so we can not avail tax benefit due to non-ownership in property. Now we r planning to make sale deed or gift deed to include our name in property. It will cost us in Gujarat 5-6 %( stamp duty & registration charges) of property value (20, 00000).
What minimum % ownership should we take so that minimum stamp & registration charge will apply?
What other formalities we have to do to avail tax benefit?
Please Help……..
Dear Manoj,
If one gets a 10% ownership in the property then he/she can claim income tax benefits to the extent of ownership share (10%) only.
House purchased by father and son (50:50 share).Rent paid by son to his father .Property is jointly owned by father and son.Wether son can claim taxs deduction. Both of them living in the same house.What the tax treatment
Dear mohandass..As son is a co-owner of the property, I doubt if he can pay rent to his father on this property.
However, both of them can claim tax deductions u/s 80c & 24b in the ratio of 50:50.
Hi,
I have taken property in the name myself wife and wife’s Mausi. I am taking the home loan from LICHFL where they have insisted uploan including her name also as co-borrower. My wife’s Mausi is retired and has contributed for taking home loan. Is there any problem getting home loan sanctioned.
Reagards,
Shreyas Gadre
Dear Shreyas..Banks may insist her (mausi) to be the co-borrower of the loan as she is one of the co-owners of the property. From your side there many not be an issue but bank’s view point is to mitigate the possible risk (litigation) in future.
I shrikanth ji thank u for reply..she is also co borrower. My query is can they reject the application
Also she does not have any legal heirs
Dear Shreyaz..Depends on your banker’s policy & underwriting guidelines.
Dear Sreekanth Sir,
1. I have a query regarding giving Joint Home loan to my brother-in-law whose is purchasing a constructed house for himself. As i am a business man and my brother-in-law is a salaried. The EMI will be paid by my brother-in-law himself. is there any problem in giving my consent. because
2. I have also purchased a under construction flat , where i am a co-applicant to my wife who is a salaried. the ownership of the flat is in both our name. Now even we both is going to take home loan from the bank. My question is that will there be any objection from the banks, when we go in for a bank loan later in end of the this year. Please also let me know the tax benefits. where both of us also can avail the tax benefits.
Dear PRABHA,
1 – May I know the purpose for doing this?
2 – Kindly note that your loan amount & eligibility depends mainly on your income & existing loans. Banks may provide the loan provided you have the repaying capacity.
Dear sir
I purchased a house with my father as co-applicant but property is in father’s name only I.e. I am not co-owner.
Emi is being deducted from my account only.
Can my father claim 100% income from that house & 100% tax benefit also.
It is for purpose to increase loan eligibility in future.
Ragards,
Rajiv
Dear Rajiv..On whose name the ‘loan interest statement’ is being issued by your banker?
Since the bank statement will show that payments have been made through your account, your father will not be able to claim tax benefits.
Dear Sir,
loan interest statement shows both name my father as Borrower and me as co-applicant.
is it possible to change bank details, so that emi be deducted from new joint account.
Dear Rajiv..Yes you can get the bank a/c details changed to joint account. Kindly contact your banker. You may request them to issue loan statement in your father’s name.
Me along with my wife purchased two houses in two different cities. In the Property A , my name comes first and my wife name comes then. In the second property wife name comes first and my name comes then. We both are salaries employees. The Loan is also in the same pattern. The EMI for both the loans are paid by me. I am claiming Tax benefits from property A. My wife does not claim the benefit. There is no mention of any ratio of ownership in the document. Neither of us resides in any of the properties. We both also resides in different cities.Now I want to avail tax benefit for both the properties. Is it possible? If yes what to do? Any document is to be prepared?
Dear Rammhan,
You have mentioned that ‘your wife is not claiming tax benefit’ and your query is ‘i want to avail tax benefit’ ?
I am bit confused. Kindly rephrase your query.
Kindly note that the tax benefits have to be claimed by both co-owners, if no ratio has been mentioned then the tax benefits can be claimed in the ratio o f 50:50.
Read:
Income From house property & Home loan tax benefits.
Hi ,
Me and my husband bought a home on his name and I being the co applicant , he is currently out of India and we are trying to get the special power of attorney from him to sell the home. The buyer who is purchasing the home is insisting us to take a joint bank account so that the cheque will be issued on both of our names.
Could you please telll me the procedure how this works, we are asking him to tell his bank to give cheque on my name since I got power of attorney. but he is not agreeing to it. Thanks for your help.
Dear ananya,
As the property is in your husband’s name, may be he would like to issue a cheque in joint name only.
I am not sure if POA is acceptable as a mode for transferring the property title.
Dear Sir,
I am going to buy one Flat. If i buy the flat buy the name of of my wife and i am will be the second applicant of that flat. Further, if i take the home loan then at that time, i will be getting full benefit of tax or not?? As i am the second applicant of the flat.
Regards,
Vivek
Dear Vivek,
If you are not going to be the co-owner of the flat, you can not claim tax benefits.
Hello there,
I have taken a HL with me as applicant and my mother as co-applicant. The flat is registered in my mother’s name only.
I am paying the EMIs every month without fail. Am I applicable for tax exemptions under section 24 (b) and section 80 C.
Please confirm.
Thanks Anurag
Dear Anurag..One has to be co-owner/owner of the property to claim tax-benefits on homeloan.
Hi Sreekanth,
Thanks for the reply.
Is there anything like Benami Transaction Act in which I can get a declaration as my mom is not earning, and I gotta pay the HL EMIs?
Or how can I become the co-owner of the property?
Please advise the procedures and steps.
Thanks
Dear Anurag,
I am not sure about Benami Act.
Your mother can execute a Gift Deed in your name. She can either make you a sole owner of the property or can make you as a co-owner by mentioned the percentage of ownership share in the property. You may have to inform about this to your banker too.
Hello Sreekanth,
Me and My fiance are buying a resale flat on both our names (I will be the co owner). We wish to take the joint loan to avail income tax benefit for both of us. Would it be possible to do the same. We are not specifying any ratio in terms of the ownership, hence would we both get a benefit of 50% tax benefit individually.
Dear Sudha,
Most of the banks might not agree for this.
However you may contact NBFCs like LIC HFL or DHFL in case banks reject your loan application.
Hello,
U have mentioned that the loan may get rejected, may i know for what reason the bank may reject the loan. Is it because we are not husband and wife till now. We are to be married by the year end. Is this an issue or the issue is with the tax benefit
Dear Sudha..The issue is with eligibility rules to get a joint-home loan.
Hi Sir,
I have read your article. Me and my wife are the co-applicant in a housing loan and the property is also in our joint name. There is no written ratio of ownership. The EMI is paid from our joint bank account. My question is: Rs.76000/- is the principal repayment and Rs.236000/- is the interest repayment for the financial year 2016-17. Whether my wife can claim full amount of principal repayment (76000) and part amount from interest payment (say 75000 out of 236000)? This calculation is to adjust our TDS liability from salary income based on our salary. Whether employer will ask for ownership ratio (it is not written like that)?
Dear Johnson,
Is it FY 2016-17 or FY 2015-16?
Ideally if the ownership ratio is not mentioned that the default ratio is considered as 50:50.
You may get one simple agreement done stating the ownership ratio and it is mutually agreeable to both of you.
You may also request your banker to issue loan statement accordingly.
Hi Sreekanth,
I am planning to but an apartment, both me and my wife are co borrowers. Can i register the house in my name alone and can we both claim tax benefits.
Can the loan amount be deducted from my account alone and still both can claim tax benefit? Please suggest
Dear Aravind,
Both have to be the co-owners of the property to claim income tax benefits on home loan.
AFTER SANCTIONED THE HOME LOAN I COME TO NKNOW THAT FOR TAX BENEFIT HAVE TO BE AN WONER OR CO-WONER,IM NOT AN WONER OR CO-WONER.NOW TO ACHIVE TAX BENEFIT WHAT CAN I DO?
Dear SUDIPTA,
May I know who is the current owner of the property?
Kindly read: Options to add spouse as a co-owner of the property.
Dear Sir,
I , my father and my sister had taken a housing loan and 10% of it was taken for shares, please tell me whether the shares can be transfered on one person name insted of three of us and what will be the procedure for it
Hai,
I & My mom own a land which is registered in both name. And mom is house wife, I am single. Can i take home loan in this property.
Dear sugan..Yes you can take.
Dear Sir,
I and my sister in law wants to purchase house jointly, in ratio of 50 : 50.
Now, my query is whether bank will allow me and my sister in law for loan because she is also working in private ltd and I am also doing job with limited company. We both wants to pay EMI separately.
Thank you in advance.
Dear Damodar,
Depends on banker’s policies & lending guidelines.
Mostly they may ask for your brother also to be the co-borrower/co-owner of the property.
Sir I will purchased row house with co applicant my wife, house purchase as a name of my wife and total EMI repaying by me only, sir can I get all income tax rebate to me, my wife has no income sir suggest me .
Dear Barwal,
If one is not an owner/a co-owner of a property, he/she can not claim tax benefits on home loan (though he/she is a co-borrower).
Dear Sreekanth,
I have a property named to my mother and she is house wife and i want to take loan on my end. i am salaried and i want to take rebet my name i not in joint property can you please let me know how can claim for tax rebet .
Thanks
Harish
Dear Harish..You have to be an owner or a co-owner of the said property to claim tax benefits on home loan.
Dear Sreekanth,
Thanks for reply, You mean i have to join in property and add name to in property right ?
Thank
Harish
Dear Harish ..Yes.
Hello Sreekanth,
My father owned a small property. He sold it. Me and my father applied for joint home loan.
We purchased a property with the help of “small property selling price” + “Joint home loan”.
Now, share of new property is not mentioned anywhere in property agreement.
Till now, we are paying 50-50 % of EMI and claiming tax benefit on whatever we are paying.
Being in higher income tax slab rate, I would like to have maximum tax benefit (I can pay 100% EMI).
Questions –
1. Is this possible to claim for whatever I am paying as an EMI? Isn’t it a common sense that government need to provide tax benefit to whoever is paying the EMI regardless of share in property?
2. I also did not understood the concept of sharing tax benefit depending upon share of property.
If, for example, property share is 70-30, should borrower and co-borrower pay EMI 70-30? What if they are paying 50-50 or even 0-100? Is it allowed? If not, why is it not allowed?
Dear Vinit,
1 – The extent of tax benefits are dependent on ones share in the property. You can get GIFT DEED done from your father to increase the ownership share in the property. You may have to inform about this to your banker too.
2 – It is taxation laws and all of us need to abide to them. If ownership share is 50:50 and even if EMIs are being paid 70:30 ratio, the extent of tax benefits can be claimed in the ratio of 50:50 only.
However, I have also observed that some individuals do enter into an agreement with other co-borrower stating that he/she would be paying higher % of EMIs and hence would claim higher tax benefit and the same is agreed upon.
Hi Sreekanth,
Thanks for your inputs.
3 – Regarding your observation of agreement of paying higher EMI –
What kind of agreement is required to be done? what exactly is the procedure?
4- If I request my bank to transfer entire loan on my account (currently, loan is drawn on joint account basis), can I facilitate myself with entire tax benefit? This is because, now, the loan would be entirely on my name and I would be the one paying it.
Dear Vinit,
You can enter into a simple agreement with the other borrower(s) 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 take help of your banker and they can give you a draft copy.
Hi Sreekanth,
My wife and I are co-owners and co-borrowers of a property but the ratio of share in not mentioned anywhere. We both have been claiming 50% each interest benefit for the last 10 years. As my salary is in the higher tax bracket and the interest component has now reduced, can I claim the entire 100% interest benefit?
Another question is that for a new property loan, my wife and I are taking a joint loan to get the reduced interest rate benefit but I would like to claim 100% interest benefit on my income. Can I be the sole owner in order to do this?
Dear Pankaj,
No, ideally you should not claim (what you have been doing for the last few years is correct).
Yes, the property (new one) can be owned by you and whereas the home loan can have co-borrowers. In this scenario, you can claim 100% tax benefits. Suggest you to ask your banker to release the loan statements in your name alone.
I and my wife own a house in joint name, we had claimed IT benefit for housing loan which has been cleared few years back.
Now I want to buy a flat in my name. Can I get income tax benefit.
Hi,
My husband & I plan to take a home loan and I am continuing my maiden name as in I have not taken up my husband’s family name, will this in any way affect us in getting the home loan? We do have the required certificates to prove our marriage 🙂
Dear Shreya ..I believe that it should not be an issue to get a home loan.
Dear Sir,
I am planning to renovate the house owned by my father. Is it possible to take a home lone in such a way that I can benefit tax deduction.
Dear Abhilash..If you are not a co-owner or owner of the property, you can not claim tax benefits.
Hi,
My sister-in–law is working in bank and gets home loan at cheaper rate.
1) Can I buy joint home loan with him?
2) If yes, he getting home loan at cheaper rate and I getting it at regular rate, what interest rate would be considered in joint home loan!!!
Dear nikhil..Kindly first check with the banker if both of you can take a joint home loan together. They may insist that both of you to be the co-owners of the property & co-borrowers of the home loan.
Dear sir,
we have purchased a flat on my mother name in the year 2010. I’m only a co applicant, not co-owner. From the beginning i was paying the total emi’s. I had claimed tax benefits for last four years. Is that wrong ?What should i do to claim tax benefits?
I have purchased a new flat now on my name. Can I claim tax exemptions for both the properties.?
Appreciate your advise.
Dear sathish..If you are not the co-owner/owner of a property, you can not claim tax benefits.
Hello Sreekanth,
My Father has the house property in his name. We plan to construct the 1st floor with Home Loan. Am not an co-owner/owner of the house property. My doubts are :
1) To avail the Tax benefits for myself, is it mandatory that I be the co-owner/owner of the property?
2) If Yes, can this be shown as Gift deed? Could you brief us about the Gift Deed procedures and the Stamp duty part of it please? Thank you.
Dear Sunny,
1 – Yes, one needs to be a co-owner/owner of the property to claim tax benefits on home loan.
2 – Yes. Your father can get gift deed in your name (can transfer 100% share or can mention the % of ownership) and accordingly the tax benefits can be claimed to the extent of ownership share in the property.
The charges to make a gift deed depends on the state where the property is located. In your case (father to son), the cost can be very minimal.
Dear Sreekanth,
I checked with my Company and as long as I have the Bank documents, they are fine with it. Also I found that for the Company it is not mandatory for me(co-applicant) being shown as co-owner. I had double checked with the Bank Manager (SBI Kerala). Seems like this restriction has been taken out to favor the parents in incidents where their childrens (co-owners) cheat the parents for the sake of property.
Am checking on net for such kind of information. Could you guide me as to where I can find the latest rule amendment related to this?
Dear Sunny,
I am not sure about the ‘provision’ that the bank manager is referring to.
Kindly request him to share any source or link which gives us more information to justify his viewpoint.
Dear sir me n my wife both are govt employees n had taken a loan of 32 lacs in 2010. Since then only she had availed the tax benefits as the loan was through her account. I m a co applicant for the flat n co borrower too. Is there any chances of me claiming my tax returns of all these years if yes what all documents are required . And if not possible at this stage what should I do to avail tax benefits in future. The loans taken for a period of 20 years. Regards
Dear Vijay,
You can surely claim tax benefits on home loan from now on. If the sale deed does not specify any ownership share, both of you can claim the tax exemptions in the ratio of 50:50.
But you cannot claim tax deductions for the previous years.
I want to purchase a 2nd house jointly with my mother who is not working with sale of ancestral property. What are tax benefits if house is jointly purchased with proceeds of ancestral property.
Dear Leena,
Suggest you to kindly go through my article : How to save capital gain taxes on sale of property?
Dear Sir,
My parents bought a House jointly owned by them but due to age factor (both being senior citizens) Bank ask me to become co-applicant and subsequently I became co-applicant. Unknowingly I have claimed income tax benefit for next 2 years as well.Now I have BT this home loan to another bank and become Applicant of this loan but still both my parents are owner of the property.
I would like to know how will I take tax benefit from this loan under present circumstances…Should I execute a gift deed or any other way?
Dear Neelesh,
You have to be a co-owner /owner of the property to claim tax benefits. Yes, your parents can execute a Gift deed (making you as a owner/co-owner) of the property. They can mention the ownership ratio, accordingly you can claim tax benefits to that extent.
Dear Sir,
I and my mother are co-owners of recently brought property. I also took home loan from Bank for buying it in which bank has put her as co borrower.
My mother is not working and I am only paying full EMI from my account. Later I learnt income tax benefit will be divided half. As she doesn’t work and her half benefit will go waste.
How can I claim full income tax benefit? Please help.
Dear Gaurav,
Both of you can enter into a simple agreement with a condition that you will be paying the entire EMIs and inform your banker to issue the loan statement in the name of you only.
Dear Srikanth
Me and My wife has taken a home loan and we both are Co-Owners of the Property , Although the entire EMI is deducted from my Account, i have few questions related to how i can claim decuttion on Interest paid
1) My first EMI started on 10 Feb 2015 but loan was sanctioned on 17 January so a Pre-EMI interest was also applied
Can i claim that amount?? If yes , what’s the process ? (i have heard that it’s spread out over years)
2) My Builder got OC in Feb 2016 and i got my flat registered on 26 March 2016 so by that time the option of claiming the deduction at TDS has gone away, Can i get the entire interest paid for 2015-16 be deducted and claim the tax refund during my IT return?
3) We are not living in the flat so please tell me how would i calculate the total interest deduction
4) Also, please tell me what are the required documents need to be submitted while filing the IT return so that i don’t miss things from my end.
Dear Puneet,
1 , 2 & 3- Kindly go through these articles :
Under-Construction property & IT benefits.
Income from house property & Home loan tax benefits.
4 – There is no need to submit any proofs to the IT dept. Red : IT declaration & investment proofs.
Dear Sreekanth
Thanks for responding back , though the link you provided clarified a lot of things but few questions still remains, Like
1) While filing IT return the Proof of Interest Paid for Loan has to be Submitted along or will IT dept already have that Info from my bank?
2) As a primary payer of loan and Co Owner of the property can i claim the entire amount or is there a limit for me to claim that?
Waiting for your response on it, appreciate your valuable time and efforts
Dear Puneet,
1 – No need to submit any docs along with your Income Tax Return. If they want,they can get it from your banker, but as of now no such thing happens in case of home loan payments.
2 – If your wife is also a co-borrower & co-owner, and if the ownership share is not mentioned in the Sale Deed, both of you can claim the tax benefits in the ratio of 50:50.
Dear Sreekanth
Thanks a lot for your valuable Opinion, keep doing the great work.
Dear Shri Shreekanth
I have taken rebate on interest of house loan taken from my department and is over now. The house was of Development authority and is not at all liveable and if at all some one want to live, it is to be rebuild , it is only a wall as all roofs have come down and it is more or less a wall structure in jungle.
Now I am retired and recently have taken a flat in co ownership with my wife who is salaried class and I am a pensioner.We are jointly sharing the EMI payment and want to avail income tax rebate on interest paid on home loan taken for the flat. Is it possible to get the rebate for both of us
regards
anil acharya
09414331987
Dear ANIL Ji..As both of your are the co-owners & co-borrowers of the property, both of you can claim tax exemptions.
Read: Income from house property & Home loan tax benefits..
thanks for support
regards
a.k.acharya
Hi Sreekanth,
Thanks for the information posted in the blog.
I have got couple of questions regarding tax benefits on a joint home loan.I have bought a plot and house would be constructed on it by a builder in a 15 months time and the agreement of sale is not signed yet.
I have applied home loan with me as main applicant and my wife as co-applicant in order to get higher loan eligibility. Me and my wife are earning and my wife is not paying tax since her income falls below the 2 lac tax slab.
1. Do you suggest me to add my wife as co-owner of the property ? Bank says that If I add her as co-owner.though she is co-applicant in the home loan low interest rate(for women) would be applicable. Is this true?
2. If I add her as co-owner of the property and there is no mention of ownership % in the agreement of the sale. Can I claim 100% tax benefits on interest and principal amount? In the future If my wife wants to claim tax benefits on home loan, what would be the minimum and maximum % of tax benefits that can be claimed?
3. Some posts in the other sites say that me and wife individually can claim tax benefits of 2.5 lac (on interest) and 1.5 lac (on principal ) that means total amount can be claims by both of us would be 5 lac (Internet) and 3 lac (on principal). Is this correct?
4. Having my wife as a co-owner of the house, what kind of complications arise in the future?
Thanks
Dear Deepak,
1 – More co-borrowers means ‘risk’ is diversified to your banker, ideally they would like it to be so. So, they may offer a better deal to you.
2 – If no ratio is mentioned, you can avail tax benefits in the ratio of 50:50. So, suggest you to include the ownership ratio in sale deed based on the current & expected income, so that both of you can claim tax benefits to the maximum possible extent.
3 – Rs 2.5 Lakh individually?? Could you please share the link/source of info.
4 – As long as your relationship is fine (wish so) there wont be any issues as such.
Hi Shreekanth,
Thanks for the quick response.
Here is the link which I was referring to.
http://goo.gl/WKdQbU
If a couple jointly apply for a loan for a self-occupied property to be held by them in equal proportion, then both the spouses would be able to claim deduction on the principal and the interest repaid separately from their incomes to the extent of their respective share in the house and the loan.
This would of course, be subject to the overall limits as specified under the act. If the total interest repayment made by them during the year is Rs 4 lakh and the principal repayment is Rs 7.5 lakh, then collectively the couple may be able to claim a deduction under section 80C for principal payment of Rs 2 lakh (Rs 1 lakh each) and under section 24 for interest payment of Rs 3 lakhs (Rs 1.5 lakhs each).
And also
http://goo.gl/WKdQbU
Dear Deepak,
In your earlier comment, you have mentioned it as Rs 2.5 Lakh per person so I have asked for the link.
Also, kindly note that it is Rs 2 Lakh per person (u/s 24) & Rs 1.5 Lakh per person (u/s 80c), the overall limits.
Hi Sreekanth,
My brother and I are co borrowers and co owners of a property. While my brother is an NRI who is funding the entire home loan, is it possible that I can claim tax benefit ?
Dear Sriram..Is your banker issuing the loan statements in both of your names?
Dear Sreekanth,
Although, the house has been jointly registered (sale agreement)in both our names, the loan statement is currently issued in my brother’s name.
I could request the bank to issue a new loan statement mentioning both our names.
Dear Sriram..You can request your banker to issue in both the names. Both of you can claim tax benefits.
Me and my brother are co-owners of the house and co-applicants of the loan, I am paying 100% of the loan, can i claim 100% benefit if I get agreement from my brother that he is not claiming anything.
Dear Goutham,
I believe that if you are making an agreement, you may claim the 100% of the tax benefits.
Thanks for your reply Sreekanth, Being co-owners of the house, there is no ownership ratio mentioned in the sale deed, does this mean
If I am paying 100% of Principal+Interest component(suppose 2L) and my brother is not paying anything nor claiming any tax benefit, I can only claim only 50% of it(i.e 1L) ?
Dear Goutham,
If ownership share has not been mentioned in the sale deed, ideally both of you can claim tax deductions in the ratio of 50:50.
But if you are making a formal agreement and informing your banker about this, then you can claim the full benefits.
Hi Sreekanth,
I am planning to buy a house. My wife is a home maker and does not have any income. Can you let me know the benefits if any if I make her the owner and I become the co-owner in terms of income tax benefits. Also will there be any issue in availing the home loan in such a scenario.
Thanks
Ravi Gupta
Dear Ravi,
If she is not an earning member of your family, suggest you to be the sole owner of the property so that you can claim 100% of the tax benefits . However you can make her a co-borrower/co-applicant of a home-loan.
Hi Shrikant
Me and my wife are joint owner of a flat in a different city . My wife is showing the rentals received from the flat as her source of her income. We are co-borrowers of the loan, I am paying 2/3 rd of the EMI and she is paying 1/3rd of the EMI from our respective accounts. Since I am in a higher tax bracket, can I claim the tax benefit for the entire interest paid and can she claim the principal amount paid, subject to max. 1.5 lakhs(my sec 80c is deducted by EPF and insurance payment itself). The bank who had provided the loan has already issued a certificate declaring interest amount paid by me and principal amount paid by my wife. Please clarify at the earliest.
Dear Bijan,
Both of you can claim tax exemptions based on the ratio of your ownership in the property, if nothing has been specifically mentioned in your sale deed, you can claim 50:50 ratio.
Also, the rental income has to be shared based on the ownership ratio.
Thanks!
Hi Sreekanth,
Myself and my brother in law are planning to buy a property, so are we eligible for joint home loan. ??
Dear Shashikant..depends on the bank you approach.. Is the property owned (or going to own) by both of you?
Dear Shrikant Reddy
I have taken a loan of 35 lac form hdfc and my wife is co- borrower. Me and wife both are salaried employee and initially for around one year EMI was paid from our joint account and latter we started paying through two cheques from individual salary accounts sharing 50% EMI from both the accounts to have more clearity.
The agreement with the builder was done by my wife . Now flat is ready for possession and registry. I am insisting on builder to make ownership jointly (50% each) to avail income tax benefits for both of us but builder is telling that earlier agreement is already submitted with hdfc and other records, it is not possible to change it now
Please suggest how to come out with this situation and to avail income tax rebate for both
With due regards
a.k.acharya
09414331987
Dear ANIL,
Your banker would be more than happy if you would like to make your spouse as a co-owner of the property. You may inform your builder that you can bear the expenses to alter the agreement (keeping in view that both of you can claim tax benefits if the property is jointly owned).
Thanks Mr Sreekanth for your quick response and advice
Can you please help me in sending a draft (if available with you) for altering the agreement i.e. for inclusion of my name along with my wife who is owner in the existing “agreement to sale” (initial agreement done between wife and the builder at the time of booking)
I checked up with the builder and he suggested that a simple revised agreement showing husband as co owner (50% each) on Rs. 100/- stamp paper should serve the purpose.
For loan I am borrower and my wife is co borrower since beginning
With regards
a.k.acharya
09414331987
Dear ANIL,
As of now, I don’t have the template. As you have already taken a loan, suggest you to first inform your banker too. I am sure they might provide you with a draft copy. Kindly check out with them.
ok, i will check with banker
regards
Hi Sreekanth,
Me and my wife together have taken a home loan but i am the only owner of the home.
Can I make my wife co-owner now to take tax benefit. Will the bank allow me to make my wife as co-owner
If I make my wife as co-owner now in March-16, can I claim the tax benefit for the EMI paid from April-15 to March-16 or only EMI going forward
Thanks and regards,
Dinesh
Dear Dinesh,
I believe that your banker may not have any issue if you would like to make your spouse as a co-owner of the property. In fact they may be more than happy if you do so.
If she becomes a co-owner now, both of you can claim tax benefits for this FY in proportion to the ownership share.
Hi Srikanth,
We have 1 joint family house ( owner of the house are my father and his two brother and all aare having 1/3rd ratio ownership in the property) Since Grandfather expire recently my other 2 uncle want to sell the property.
My father wanted to buy there part i.e 2/3rd of my uncle, in that case i am planning to take home loan with my brother both together to pay there part.
Question is :-
1) whether our name in the property is required to claim deduction under the income tax ??
2) whether bank gives loan on such property where we are going to be a joint owner /coowner
3) whether is there any condition in the income tax that loan taken should be outstanding for so many days minimum , let say if i repay the home loan taken from the bank on the next days , whether still i will be eligible to claim the deductions???
Dear Deepesh,
1 – Yes. You should be a co-owner of the property to claim tax benefits.
2 – Yes, but depends on the banks’ policies & guidelines. They may insist your father to be a co-borrower (co-applicant) of the home loan.
3 – Depends on the terms & conditions levied by your banker. Yes, you will be eligible for tax benefits in that respective FY.
Sir,
I took joint home loan with my wife for my property also co-owned by my wife. She is housewife and I only pay full EMI.
My 8OC limit is already exhausted by LIC/PF & PPF. Can my wife claim exemptions under 8OC for tax benefit upto 1.5 lakhs. Also amount of interest exceeds 2 lakhs limit per year. Can exceeding amount can be claimed in tax benefit by my wife upto 2 lakhs. Then we both can claim tax benefit on 2 lakh interest each.
Dear kuldeep,
Is your wife a tax assessee? If yes, she can claim tax exemptions u/s 80c & 24.
If ownership has not been mentioned in your sale deed, both of you can claim tax exemptions in the ratio of 50:50.
Sir, iam state govt. staff. Myself and my daughter together avail a housing loan in LIC.For tax payment they are giving statement together. but in our department they are asking the percentage repayment certificate between us.But LIC ,they informed that they didn’t give.
Please guide me how to get that letter and whom gives that letter?
Dear angayarkanni..Is the property co-owned by both of you?
Hi Sreekanth,
Myself and my spouse , both are salaried. We purchased a property jointly (Co-owners)and the home loan for that property is also a joint loan(co-borrowers). Both of us claim 50-50 tax benefits. Now we are planning to buy an apartment in my name. But the loan as a joint loan. In this case, Can my husband claim the complete tax benefits for the first property and Can I claim the complete tax benefits for the second property?
Dear Hema,
Second property as it is proposed to be solely owned, you can claim 100% tax benefits on it.
But on first property, the tax benefits have to be claimed as per the ownership ration (50:50) only.
Hi ,
I am having cibil score of 673 and my wife is having 790, I had a check bounce previously that decrease my cibil score. All my personal loans that i have applied were got rejected because of it. Now i am seeking for Home loan but i am scared if it got rejected again. So Can i apply for home loan with my wife as joint account holder. What is the chance of getting home loan .?
Dear sandeep..It depends on the banks’ policies & underwriting guidelines.
If possible, you may wait for some months, pay all your dues/bills on-time and try to get improve your credit score.
Also, suggest you not to inquire for loans at many banks, this may also have negative impact.
You may stand a higher chance of getting a home loan if you apply jointly with your spouse.
Hello sir,
I have taken a home loan and my mother is co-borrower in the loan but I am not the co-owner of the property. EMIs are paid by me as my mother is house wife. It is known that since i am not the co-owner of the property, i cannot avail tax benefits. kindly suggests that how i can avail tax benefits.
thanks
Dear Prakash..Your mother can gift the property (full share or a portion of it) to you and you can become a co-owner of the property.
hi sir, i have taken home loan with my mother as co applicant and co owner…can you please explain how can we both get
tax benefit for tax exemption…
Dear rajesh..Both of you can claim tax benefits as per the ownership share. If the ratio is not mentioned in the sale deed, both of you can claim equally.
Read: Understanding the tax implications of income from house property.
Dear Sreekanth,
I am Mohan and wish to apply home loan with my wife as co applicant. Land is in the name of my wife. I am going to pay full EMI from my salary. Since my wife is home wife, she did not claim any tax benefit and i wish to claim full tax benefit. Is it Ok?
Dear Mohan..If you are not owner/co-owner of the property, you can not claim tax benefits.
My wife is the owner. I am only applicant and intend to pay all EMI from my salary. Kindly confirm whether i will be eligible for 100% tax benefit.
Dear Mohan..No, you can not claim tax benefits.
If the co-applicant is paying the entire EMI but not the co-owner, Is co-applicant eligible for Tax benefit? Eg: the loan is taken for purchasing the resale house and the co-applicant (husband) is not the co-owner. The owner(housewife) is the main applicant. Please advise.
Dear niteen..One needs to be either owner or co-owner of the property to claim tax benefits on home loan.
me and my wife taken home loan jointly(co-owner) . now 2015-16 principle paid rs.60000/- and interest paid rs.30000/- now my wife does want tax benefit, now please tell me can i take tax benefit fully (rs.90000)
Dear ganapathi,
Ideally one has to claim tax benefits in the ratio of ownership, if there is no such ratio being mentioned in the sale deed, it can be assumed as 50:50.
Sir,
ok sir , my wife does not take 50% tax benefit so can i take 100% of tax benefits
Dear ganapathi..If she is also the co-owner of the property, you can claim only 50% of the tax benefits.
Hi srikant,
I would like to know if I made my wife as a co Applicant for home loan who is not co owner of property can she create trouble Me if i would like to sale property
Dear ramesh..Though she is not a co-owner, she can prove that she has contributed to a certain extent in repaying the home loan and hence can legally fight for a share in the property.
I am at age 31 and i have Govt. service left 30 yr and the land is in my father name(aged 58 yr). If we take home loan(hbl) then bank(sbi) providing me 12 yr tenure to repay the loan but i want 20 yr tenure for taking hbl. is it possible trough sbi or any other bank. Eager to have your valuable suggestion.
Dear SUMIT..Ofcourse it is possible to get a 20 year loan. Check with SBI itself.
Hi,
Thank you for your informative posts above.
I have purchased an under-construction Flat in Pune – expected to get possession in Dec 2016. I am the primary applicant and my mother is a co-applicant for the property and the Home Loan from AXIS Bank.
I am currently paying the Pre-EMI interest for the flat as my mother is a homemaker.
1. Hence based on the above posts, I will be able to avail the tax benefits only after the possession in 5 yearly equal portions. Right?
2. My wife is working and has no loan in her name. Now, I wish to add my wife as a co-owner and a co-applicant for the flat so that we both can avail tax benefit on the EMI that we will pay after possession. How can I do that?
What government formalities/deeds/contracts will need to be made? Can this be done before possession or after possession? Approximately what would be the cost for this transaction?
3. I understand the 1.5L on Principle payment and 2L on the interest can be availed for tax benefit. Can me and my wife (after adding as co-owner and co-applicant) avail the tax benefit of 1.5L on Principal payment and 2L on the interest SEPARATELY. Cumulative 3 L on Principle and 4 L on Interest?
Dear Manish,
1 – Yes. You can claim Pre-EMIs in 5 equal installments. When did you take home loan?
2 – Has the property been already Registered? You can add your spouse name through a Gift Deed by giving a ownership share in the property. This is less costly when compared to adding her name in ‘Sale Deed’.
I believe that there won’t be any issues in making the housing loan in joint names that too with your wife as a co-borrower.
You make a request letter requesting your banker to add her name also in the loan and make it as a Joint Loan a/c. She has to execute the documents as a co borrower acknowledging her liabilities of the loan and terms and conditions of the loan then they will simply include her also as a co borrower .NOTE this is an advantage for the bank also as she is also like an additional security.
3 – No. Whatever you pay as EMIs have to be claimed as tax benefits subject to the overall aggregate limits.
Hi Sreekanth,
Thanks for your reply.
1. I have taken the loan in Nov 2014.
2. The property is not yet registered. there is an “Agreement of Sale” between the builder and me.
3. My example is same Sahya nd Santosh above in the article. Hence is it possible that My wide and me avails a tax benefit of 1.5 L on principle and 2L on interest individually?
Dear Manish,
1 – You can claim tax benefits on Pre-EMIs once you get the possession of the property.
2 – Inform your builder about your decision to include your Wife in Sale-deed. If required, you can write a new ‘Sale Agreement’.
3 – As per ex, the payments are Rs 2.5 Lakh, so they can claim Rs 1.25 Lakh each. Small correction (I misunderstood your query), if your payments are Rs 3L & Rs 4 L, you can claim 50:50 ratio. Also, you may declare ownership ratio in the Sale deed based on the income slabs you are in. Higher income earning person can claim higher tax benefits but need to have same proportion of ownership share in the property.
I have purchased a home before 5 year with my brother. both are 50% partner in home. There is no home loan. But Now i want to take home loan & my brothers wants to relieve from home partition. so it is possible homeloan ?
Dear Paresh..What do you mean by ‘relieve from home partition’, unable to get this.
Hi,
Recently we have taken joint home loan with my husband. Also we have joint ownership of the house.
We both are working and total amount of the loan is deducted from Husband’s Bank Account.
I dont require tax exemption on my salary, hence can my husband will able to aply 100 % tax exemption
on his salary income.
Dear Megha,
Is the loan statement being issued in both the names?
Your husband can submit ‘Self-declaration’ signed by you (stating that you will not claim tax benefits) to his employer. Some employers do accept this document.
Me and my husband has taken joint home loan to buy a house. We both are co-owner and co-borrower. Joint home Loan account has both names i.e. me and my husband. I am paying the full EMI and it is being paid from my account.
To submit investment proof in company Bank has issued provisional certificate under both names. There is no ownership ratio in sale deed, nor we have any agreement that I can claim full 100% benefit.
Now we are in process of divorce. And my husband is claiming 50% tax benefit, though I am paying the full EMI which is deducted from my account. And my husband is not paying at all towards home loan repayment.
My question is Can I claim 100% tax benefit when I do not have ownership ratio in sale deed, nor I have any agreement that I can claim full 100% benefit ?
Dear Yamini,
As the property is co-owned, he can claim 50% tax benefits. The default ownership ratio is 50:50 (if ratio is not mentioned in the Sale Deed).
Hi Sreekanth
Can spouses who are co-owners & co-borrowers continue to hold the property even after divorce and claim the income tax benefit as per their ownership?
Also can the lady (now divorced and single) take another home loan while continuing the previous one and being co-owners with parents in the 2nd home loan? I understand that the norm says that a married woman cannot be a co-owner/co-borrower with parents but the norm is silent on a divorced woman.
Dear Sonal,
Yes, you can claim tax benefits on first property.
It’s not a norm but generally bankers/lenders avoid accepting married lady a co-borrower if applying along with her parents.
Yes, if you can get the loan for second property, you may go ahead..
Hi Sreekant,
I have a property in my own name only , I want to take home loan for construction with my wife, she want to be co applicants (we both are working) we both are ready to pay emi separately or jointly. Can we both avail tax benefit .,
No only u can claim tax benefeit,bcoz ur wife have no ownership in property.
Dear Rajnish..If your wife is not the co-owner of the property, she can’t claim tax benefits.
Dear Sreekanth,
I am the main applicant for a home loan and my wife is the co applicant. Though she earns more than me, I was made main applicant because she is on contract and I am permanent. Two questions:
– can she be the sole owner of the home as a co applicant?
– if yes, can I still avail of tax exemption since the emi is debited from my account?
The key question being whether it’s okay for me to not own the property as main applicant.
Need your advise…
Dear Abhijit,
1 – Yes.
2 – If she is the sole owner, only she can claim tax benefits on home loan, though are a co-borrower.
Hi Srikanth,
I am planning to buy a flat for giving out on rent. I am thinking of adding my wife as a co-owner to the property. In this case, how the rental income has to be declared while filing for tax returns? Rental income against my name or my wife’s name?
Dear Raju,
Depending on the share in the property, co-owners should report the income from house property source separately in their returns. Suppose an individual owns 30% of a property, then he/she should report 30% of the income in his/her return.
Hi..
Myself and my brother both are planning to buy a property (Approx 80 lakhs). Ia m residing in Mumbai but my brother lives in Delhi where the property is located. To increase the loan eligibility we are buying the property jointly. We want to have the tax benefits separately. What documents will be required at the time of purchase. What actually it means Co-owner & Co- applicant.
Please reply as soon as soon possible .
Thank you.
Dear Puneet,
If you apply for a home home loan jointly, both of you are called as ‘co-applicants’ of loan.
If the property gets registered (sale deed) in both the names, you are the ‘co-owners’ or joint-owners of the property.
If you do not mention the ownership share in deed, the default is 50:50, accordingly you have to claim tax deductions on home loan.
In case depending on your salary, if one of you want to claim higher tax benefits, you can mention the ownership share in sale deed as per your requirements.
Hai Sree, this is Lakshmi ravi.
I am having an idea to take home loan. Kindly explain and advice the details of getting loan in joint names & tax details etc;
Dear Shreekanth,
Here is my query.
My dad and I are buying a ready apartment, the all in cost of which is likely to be 35 lakhs. Dad will be paying 15 lakhs upfront from his existing sources of funds, while I will take a housing loan for the 20 lakhs which is my share. The share will be defined as 57% and 43% in my favor.
This will be my second apartment (my first apartment doesnt have any loans against it), I would like to know the following :-
Being a co owner, can I take a housing loan only for my share of the apartment?
As this will be my second house, what sort of tax benefits will I be able to get?
I am assuming I will have to show deemed rental income against this apartment (as it will not be let out as Papa will be staying there). Will it be in the same proportion as our share defined in the agreement?
Would appreciate your kind views.
Dear Kishin,
1 – Yes you can take home loan for your share. But you may have to check about the loan eligibility amount Vs the required loan amount (as per your share). Also, banker(s) may ask your father also to be the co-applicant of the loan.
2 – Read : Income from house property & tax implications.
3 – Deemed rental property is a let-out one in terms of tax calculations.
dear shrikant..
recently i have taken a home loan from axis bank in which i kept my brother as an co applicant for increase the eligibility. my query was that shall i kept my brother as owner of the flat..
but i need regeistration to be done for my name please assist..
Dear Shaikh..It’s your/family’s decision 🙂
Hi Sir/Madam
Myself and my brother are got the home loan in last year,all the documents(sale deed,Home Loan Certificate,Registration and all DOC) but loan amount deduction only deducted my brother salary A/C,We will claimed 50% of TAX benefit each one,How can we both get better TAX benefit.
Note:
Some body said doesn’t claimed each one, EMI transaction are doing who’s A/C that only claimed, other doesn’t claimed.
Kindly give me a best solution
Dear Vadivel..On whose name the property is? Is it co-owned by both of you?
Ok, Thanks
all the documents had in both names but loan amount EMIonly deducted my brother salary A/C,Have possibility to both will Claim 50% tax exemption for every year,kindly reply me
Dear vadivel..If your loan statement carries both the names, both of you can claim tax benefits. Suggest you to ask your banker to deduct EMIs from joint-account (if any) so that there both of you do not face any issues in the future.
Dear Seekanth,
I’m Anand. I’ve availed home loan from SBI last year. I bought the loan as joint account, my father, myself and my wife. We all live in that property now. The interest is around Rs.28000. But to make it a round figure both myself and my wife pay Rs.15000 each as EMI. In the interest certificate, the bank has given details as follows;
Repayment of principal : 0.00
Repayment of interest : 195000.00
In this case can both myself and my wife avail IT benefits? Kindly help us, as we are new to housing loan formalities.
Thanks in advance.
Dear Anand..The above details are for which Financial Year? When did you take loan? When did you take the possession?
May I know who are all the co-owners of the property?
Hi Sreekanth,
Thanks for your reply. I furnish the details of my home loan.
Bank: SBI
Date of Sanction : 29/01/13
Limit in (Rs) : 3000000
Name(s) of Borrower(s) : Mr. DHANDAPANI C; Mr. ANAND D; Mrs. SANGEETHA D
We entered the house during December 2014.
Details of PROVISIONAL HOME LOAN INTEREST CERTIFICATE:
This is to certify that the repayment expected in the above noted Home Loan account for the period
from Start of financial year to End of financial year is as under.
From To Amount in (Rs)
Actual Repayment : 01/04/15 to 31/12/15 – Rs.270000
Expected Repayment : 01/01/16 to 31/03/16 – Rs. 71190
Total : 341190
Of which, Principal : 35427
Interest : 305763
Both myself and my wife pay Rs.15000 /- each as EMI. Kindly tell us if both of us could avail IT exemption and how?
Thanks
I need to submit IT returns for this financial year.
Dear Anand,
May I know who are all the co-owners of the property? Only owners of the property can claim tax benefits.
Also, if you are paying Rs 28 k as EMI, you can claim Rs 30k as tax deductions.
If it is Self-occupied property, you can claim interest payments of up to Rs 2 Lakh u/s 24.
The interest payments made during Jan 2013 to Mar 2014, can be claimed in 5 equal installments as Prior Period interest. 2nd installment for FY 2015-16 subject to overall aggregate limit u/s 24.
Read:
Income from house property & IT implications.
Under construction property – PPI – Tax benefits on home loan.
Thanks Sreekanth. Kindly clear my last doubt. In my case, shall both myself and my wife share the interest and principal amount given by the bank in 50:50 ratio or shall we share as per our wish? Because my wife is getting higher salary. If we can able to share as per our wish both of us will be befitted. That’s why!
Dear Anand..If no ratio of ownership is mentioned in your Sale deed, the tax benefits can be claimed in 50:50 ratio. If you want to change the ownership ratio then you may have to change the Sale deed details accordingly.
Thanks Sreekanth.
Hello I am Bhavesh.
Me and my Brother purchased 3 BHK home before 2 years. We both are joint owner of property. We have taked home loan of 16 lakh. But EMI was deducting only from my Brother’s account because I was the co-applicant in loan.
So can I get tax benefit?
Dear Bhavesh..If both of you are co-owners & co-borrowers, you can also claim tax benefits as per the ownership share.
hi,
My husband and his father are co-borrowers but my husband is the owner of the housing property.
My husband’ father is no more and I would like to know if my husband’s sister / mother have any claim to the above property.
Dear Tinku..Did your husband inherit it? (or) acquired through his own earnings?
Hi
I have a house and a housing loan which is co-owned by me and my wife. Now we are living in a different city and that house is a let out property. I have a few questions on the same
1. Can i Claim the 100% tax deduction as I am paying the entire housing loan ?
2. Can i show the rental income in my wife’s tax return and not show anything in my return as the rental agreement is in her name and she is the only one getting rent in her account? Is it possible under income tax act ? As my wife is not employed and she will be in a lower tax bracket than I am ?
3. How will I show the rental income to my employer as in case of let out property you have to show the rental income as per the fair market value even if the house is not let out ? Do I or my wife need to give some kind of declaration that the rental income is considered in her return and not mine.
I am doing this to save tax as I am in 30% tax bracket whereas my wife will be in the 10% tax bracket
Thanks
Danish Siddiqui
Dear Danish,
1 – Whether the loan statement is issued in both the names? Are the EMIs being paid from you individual account? Is your spouse a co-borrower?
2 & 3 – Ideally you have to add rent income in your total income, in the proportion of your ownership. Regarding the claiming of taxes, you can claim entire EMIs and you may have to submit ‘self-declaration’ made by your wife that she is not going to claim the tax benefits. You may also request your banker to issue loan statements in your name alone.
1)Loan statement is issued only in my name and the EMI’s are paid only from my individual account. My spouse is a co-borrower and co-owner of the property.
2) Is there a way I can avoid declaring the rent in my taxable income as the rental agreement is in my wife’s name ? As my wife is unemployed she has no other income other than the rental income? Is there a provision in Income tax act which allows me to declare the rental income only for my wife while I take the deduction for the housing loan principal and interest as I am in the higher tax bracket
Thanks
Danish Siddiqui
Dear Danish,
1 – You can claim full EMIs as tax benefits (subject to overall aggregate limits u/s 80c & 24)
2 – I believe that the rental income has to be shown in ITR as per the ownership share in the property.
Hello srikanth sir,
Property belongs to my father (registered on my father’s name) and I am the co applicant for housing loan, can i avail the tax benefit? The EMI paid by both.
Dear VINAY..You need to be the owner/co-owner of the property to claim the tax benefits.
Hi,
Me and my wife both have joint home loan for an under construction property. Currently the wholr amount of loan EMI is being paid from my wife’s account. Could you please confirm what should we do if we both want to take benifit of this please.
Dear Soni..Are both of you the co-owners of the property?
Hi Sree,
Sorry i have a confusion on this. I
Am thr co-applicant for thr property. Would i be called co-owner?
Dear Soni..You become co-owner only if your name is registered in the Sale Deed along with the other co-owner(s) of the property.
My father and Mother is the owner of the house. But we two brothers X and Y had taken house building loan jointly . Can we two brothers claim tax benefit under 80c separately?
N.B- EMI is being deducted from one brother account. Who will get the benefit of tax deduction benefit. Please sir kindly reply me soon.
Thanking you
Dear Tapan..If both of you (brothers) are not the co-owners of the property then you can not claim tax deductions on home loan (even though you are the c-borrowers).
Hi Sreekant,
I am Ashish, i have taken home loan jointlty with my wife from HDFC bank ,and are the co-owners of property. I am paying entire EMI of bank .My wife is house wife and she is getting rent on that property. We havent mention any partnership ratio in house property nor in home loan.
I would like to ask you,
1)CAN I AVAIL FULL TAX BENIFT OF ENTIRE INTREST PAYBLE.?(the statement of bank cerificate is issued on both name )
2)THE RENT WHICH SHE IS GEETING INTO HER SEPARATE ACCOUNT ,IS THE INCOME FROM RENT IS 50-50% TO BOTH?
2)Can she file ITR as she is getting the only rent income.?
Dear ASHISH,
1 – Yes you can. If it is issued in both the names, then you may have to submit ‘self-declaration by your spouse’ that she would not be claiming tax benefits for this FY (assuming that you are a salaried employer and you have to submit investment proofs). Suggest you to inform your banker to issue Loan certificate only in your name.
2 – If the entire rental income is received by her then I believe that there is no need for you to show it in your ITR. (assuming it is not a joint account). Ideally the rental income should be shown in 50-50% by default.
3 – Yes.
Dear All,
I am planning to buy a property having an Agreement value of Rs 75,00,000.
In this connection, I want to take a home loan of about Rs 60,00,000.
Based on my eligibility, I can take a loan of about Rs 40,00,000. Thus, my eligibility is low to borrow amount of Rs 60,00,000.
To increase my eligibility i am planning to add my married sister as a co-applicant. Can you tell me which bank / company allows for a married sister to be a co-applicant ? I am ready to pay higher amount of interest as well.
Dear HARSH,
Whether the bank(s) accept your married sister as co-applicant it depends on their policies & underwriting rules.
But most of the banks may not accept her as co-applicant.
However you may check with Non-Banking Finance companies like LICHFL, Dewan HFL etc.,
Hello,
for FY 2015-16 i transferred the loan from LIC to SBI. what document i need to provide as income tax proof. I got a certificate from LIC which shows that whole amount is cleared as SBI paid for that, but thats not helping me. I got the account statement from LIC which my company rejected.
can you please guide what documents i need to submit to get the tax benefits?
Thanks
Rajiv
Dear Rajiv,
You can submit loan statements of both LIC (till the time you are with them) & also of SBI. What was the reason that your employer gave?
Read : IT declaration & Investment Proofs.
Hi Sreekanth,
You are insisteing that we should inform bank about this. Can you pls tell me the purpose of intimating the loan repayment shares to the banker.Is it not enough if an agreement is entered into between two brothers about their share in the loan repayments.
Dear Srinivas,
But it is the banker who issues ‘loan statement’ right? What if they issue loan statement in one borrower’s name only?
Sir,
I have a query regarding eligibility of availing tax benefit on a Housing Loan. I’m a co-borrower but not a co-owner. The property is in the name of my father and mother. I have a sister too.
Can i claim for both principal under 80c and interest ?
Regards,
Harun
Dear Harun..One needs to be a co-owner of the property to claim tax benefits.
For both principal and interest?
Yes dear Harun..
Dear Srikanth,
Recently we have taken joint home loan with wife as applicant and self as co applicant and my wife is not a employee. The complete EMI is being deducted from my salary. Am I eligible to claim total IT benefit under section 24?
Dear Mr Reddy,
Are the EMIs getting deducted from your individual account?
Yes, you can claim total tax benefits (assuming you are the owner/co-owner of the property). Your employer may ask a ‘self-declaration’ from your spouse regarding this.
Also, you may check with your banker if they can issue ‘loan statement’ in your name alone.
Hi Sreekanth,
Myself and my mother jointly applying for home loan. The loan agent is asking for form 16, whereas i am not eligible for IT returns. So how can i produce form 16 and i have changed my job 5 months ago. I contacted my previous employer regarding the same and they informed that they wont be able to provide form 16 as I wont fall in tax paying slab i.e my ctc less than 2.5 lakh in my previous organisation. Please suggest me what would be the possible way out.
Waiting for you response.
Regards,
Solman Raj
Hyderabad
Dear solman..You can submit your Salary slips & bank statements.
I went through the tutorial available at IT dept. web site. I did not find anything for this case
Possesion Letter Issued in the month of Feb-2016. How to calculated fair value of the rent?
Will it be annual or only for 2 months?
Dear Somnath..Only for 2 months.
My IT declaration was rejected by stating that “A declaration is required from co-borrower for claiming full amount, that he/she will not claim this tax benefit”. Could you please let me know from where i can get that document?
Dear Prasanna,
You can get the declaration on a piece of paper from the co-borrower.
Check with your employer if this ok. Else you may have to get it done on Stamp paper.
Does the loan account statement carry all the borrowers names?
Hi Srikanth,
We are palnning to buy house. If the property is on my wife name alone and if she is paying the total EMI can we avail 50:50 tax benefit . Is mandatory that I shd be co-owner of the property?
Dear Naresh..Yes, it is mandatory (even-thoughyou are a co-borrower).
Dear Sreekanth,
Requesting for some guidance please, for the following scenario.
Background:
1. Plot is in my mother’s name
2. We plan to construct a 4 storied building, which will be distributed between my mother, sisters and a brother (i.e. 6 flats will be built on 4 floors. 4 will eventually be given to siblings as stated and 2 will remain with my mother)
3. Ownership of a given flat from my mother’s name to individual’s name is possible only after 4 years (to negate capital gain tax impact, which comes from selling previous property owned by her)
4. In this case, I need to apply for a home loan for only the portion earmarked for me.
5. My home loan eligibility is good as my salary component, credit rating, previous track record of loan repayments, etc., are very good and per se obtaining a loan is not a problem
Queries:
6. Given that I’ll not be the owner for the flat designated to me till 2020, can I apply and obtain bank loan for the same?
7. Should my mother necessarily become a co-applicant for my loan?
8. Also, can I avail applicable tax benefits?
Thanks for your able guidance and inputs.
Regards,
Giridhar
Dear Giridhar,
6 & 7 – You can apply for a loan as a co-applicant. Banks may insist your mother also to be as co-application for the home loan.
8 – As you are not the co-owner of the property you can not claim tax benefits (till the time you are become the co-owner).
In this context, suggest you to go through this article & comments : ‘Under-construction property & Tax implications on home loan”.
Hi Sreekanth,
Very informative artcile. Thanks a ton.
My query is that you have mentioned – for tax benefit, loan repayment ratio should be same as ownership ratio.
I am in a joint ownership of property with my Brother. But in the agreement we have not mentioned the % ownership. He is the main borrower & am the secondary.
I’m paying the entire loan amount.
Can I get tax concessions for housing loan ?
Dear rahul,
Is the full EMI being deducted from your bank account only?
By default the ratio is considered as 50:50.
I took a home loan of 41 lakhs and my wife is a co-applicant. She is employed as a teacher and an earning member. but i have not done any agreement about loan or emi sharing. both me and my wife have the loan accounts linked to our savings bank account. Can she claim tax benefits.
Dear Anand,
Yes, she can claim the tax benefits. If the ownership share has not been mentioned then by default she can claim 50% of the EMIs as tax deductions subject to overall aggregate limits.
Read:
House property & Home loan tax benefits.
Hi all,
Me and my wife both are co-owner as well as co-borrower. EMI is deducted only through my bank account (my wife name is not there in that account). Can she also claim tax benefits?
She submitted the paper to his office but they are saying that as you haven’t paid any amount so you cant claim tax benefits.
Dear Ravi,
If you can get ‘Certificate of Interest’ from bank with names of all co-borrowers contributing to EMI, then she can claim tax benefits.
Suggest you to direct future EMI payments through a joint-account. Kindly check this with your banker.
Dear Sreekanth,
My mother in law owns house. We are planning to renovate the house and construct an additional floor (2nd floor). I have the following queries:
1. Can me and my wife be given ownership with the consent of my mother in law?
2. If partially I become the owner, can I opt for a home loan and repay the loan and gain the tax benefit?
3. My Mrs is house wife, hence I will be paying the loan and clearing the financial things.
Kindly, provide us your valuable suggestion.
Dear Venkataraju,
1 – Yes, you may have to include your names in the Sale deed (as per the share in the property).
2 – Yes. You can claim tax benefits as per the ownership share.
3 – You may enter into simple agreement with your spouse that you would be paying all EMIs and claiming tax benefits accordingly. Inform about this to your banker too.
A home extension loan can also fetch you the same tax benefits as a home loan. Under section 80C, you can avail tax deduction up to Rs 1 lakh per annum on the principal amount repaid and under section 24, you would be entitled for a deduction of up to Rs 2 lakh per annum on the interest paid.
Dear Sreekanth,
I have taken home loan jointly with wife. She is co-owner. She is not earning as house wife. I am the sole earner end paying the whole EMI. Will I get the tax benefit of 100% or 50-50 for sec 80C & 24. My accounts office last yr given 100 5 benefit but this they agree to give 50% tax benefit according to IT rule is it correct. Please guide me.
Dear Sankar,
You can only claim 50% (if ownership share is not mentioned) of tax benefits. Your employer is correct.
You may however enter into a simple agreement with your spouse stating that you would be paying the entire EMIs. Also, check this with your banker too if this is possible.
Hi Sreekanth,
I took a home loan in my mothers name five years back. She is the sole owner of the property. She is a house maker, so SBI insisted me to join the loan as a guarantor. Now i am not getting any tax benefits. Recently I got a call from another bank saying that they will provide a home loan in my name and my mother as co-applicant then transfer the loan from SBI. Then I will get the tax benefits. Is that correct?
Many Thanks,
Saju
Dear saju..No, as long as you are not the owner/co-owner of the property, you can not claim tax benefits on home loan.
Hi Sreekanth,
I have taken house loan on name of me, my wife and my mother but on papers my mother and my wife are co owners of property. So I have few queries :
a) Being a co borrower only of house loan, can I avail tax benefits?
b) Being co owner as well as co borrower, can my wife avail tax benefit?
c) On being a co borrower of loan only, if I am not able to avail tax benefit, can I add myself as co owner and get tax benefit?
Regards,
Deepak
Dear Deepak,
a – No.
b – Yes.
c – Yes.
Hi Sreekanth,
Thank you for wonderful infomation.
I have a query. Can ownership ratio & loan sharing ratio be different? Eg. my ownership is 50% but i have 80% share in loan then, can i claim 80% interest & principal component?
Please kindly share the reference of the provision also. I couldn’t find it.
Thank you
Dear Manasi,
The tax benefits ratio is dependent on the ownership ratio only.
Click here to download ITdept’s tutorial.
Hi Srikanth,
My father and me are co borrowers of loan and co owners of property. I want to understand if i can claim the entire interest and my father the entire principal amounts.
Thanks
Jitesh
Dear Jitesh..The tax benefits have to be claimed in proportion to the ownership share in the property.
If you want to claim whole benefits (int & principal), you can enter into a simple agreement with your father that you would be paying the entire EMIs, also you can inform about this to your banker.
I want one clarification. I am house wife. My son is working in bank. I am applying for home loan. he is not the owner of the house. whether he can exempted from income tax for the repayment amount
Dear Rama..He has to be either owner or co-owner of the property to claim tax benefits. He can be a co-borrower of the loan but can’t claim tax benefits.
Also, if you are house wife, it might be tough to get a home loan. Do you have any source of income? Are you a tax assessee?
My wife is govt. staff nurse in chandigarh, salary 60,000/- and i am working in a newspaper company salary 45000/-. we want to buy a floor in chandigarh worth 70 lacs. how can we took joint housing loan.
Dear Rajesh..Kindly visit a bank that you are comfortable with and check your loan eligibility with them. You may have to provide your ITRs, salary slips etc with them. If you have good credit score, you can negotiate on interest rates.
Read:
Why maintaining good credit score is important?
MCLR – New home loan base rate system from Apr 2016.
Hi Srikanth,
My wife is the owner of her parental house, as her mother gifted her the property. Now we would like to demolish and reconstruct a new house, for which my wife ( working and IT Assessee) and me would like to go for a Join loan so that we can get better loan amount. In this case, can I also avail Tax benefits for the EMI share paid by me. OR should I also need to be co-owner of the property.
Dear Baskaran..To claim tax benefits , you also need to be a co-owner of the property.
Dear Shrikant,
I am from Bangalore. The property that Iam curretly living is in my dad’s name. My mother and my brother are the legal heirs of the property as my dad did not make any will. We are planning to renovate the current house and iam looking for a loan. I am the only salaried person amongst the three of us.I am 42 yrs old.please tell me if i will be eligible for housing loan if my mother & brother become co owners.
Dear Rajitha,
You can get home loan but you may not be eligible to claim tax benefits on home loan as you are not the co-owner of the property.
Banks may insist your father to be a co-applicant for home loan.
Hi streak that
My query is as below
1) I took a joint home loan with my spouse . Both of us are joint owners in the property which was ready to move in
2) We let out the property and the entire rent is deposited to my spouse’s bank account and the entire rent she is showing it as her additional income while filing her returns
3) I am servicing the entire EMI
4) Currently we are staying in a rented accommodation for which I am claiming HRA
I have bank statements to corroborate #2 and # 3 above . My question is
While showing the net loss for my house (Rent-Municipal taxes- Interest ) for tax deduction, since I am not receiving any rent , can it be treated as nil and I can claim tax benefit on entire interest being paid on the loan.
Otherwise what’s the best option for me to claim tax deduction for the home loan I am paying in the above scenario
Dear Anuj,
I believe that the rental income has to be divided in proportion the ownership share of the property. On whose name the rental agreement has been made?
Is your spouse a tax assessee? Suggest you to claim tax benefits in proportion to your salaries, that would be more beneficial.
Hi Sreekanth,
I and my father having the joint loan of 30,00,000. We both are the owners and co-borrowers in the loan.
We both want to avail the tax benefit.
Questions:
1. Where to find the ownership proportion/ownership ratio like 60:40 or 50:50? or is it on mutual basis?
2. While declaring the taxes – if Principal amount paid in a fiscal year is 1,00,000, then can one applicant declare 50,000/- and can another declare 50,000/- or can both applicants declare 1,00,000 each under the 80C section. Which is the correct understanding?
3. While declaring the taxes – if Interest amount paid in a fiscal year is 3,00,000, then can one applicant declare 1,50,000/- and can another declare 1,50,000 can both applicants declare 3,00,000 each under the section 24. Which is the correct understanding?
Dear Hrishikesh,
1 – If ownership share is not mentioned in the sale deed, by default the share is assumed as 50:50.
2 – If the total principal repayment is Rs 1 Lakh, each co-borrower can claim Rs 50k.
3 – Rs 1.5 Lakh each
Dear Sreekant,
Both me and my husband are 50:50% co-owners and co-borrowers. My husband’s income is much more than me. If he only pays the full EMI and claims the full tax relief will it be more beneficial? or both of us should claim tax benefit? My view point is that if he only claims the tax relief that will leave him with much more non-taxable income. OR should both of us claim tax relief? I have no issue in paying more income tax (by not claiming housing loan relief) as long as we are jointly left with more household money.
Dear Nomita,
If his income is higher than yours, he can pay contribute more towards EMIs and claim tax benefits accordingly.
You can enter into a simple agreement after informing your banker that your spouse would be paying the full EMI or higher EMI.
Hello, Sreekanth !
Nice to read your reply. Can you please provide me any circular/notification regarding this i.e. entire tax benefit can be taken by the co-owner paying the entire EMI.
Hi,
My sister is married and due to some financial reasons she wants me to be the co-applicant in her home loan. Can you please let me know if I am eligible for becoming co-applicant in her home loan? I am not a co-owner of the property.
Dear Prateek..Most of the bankers or home-loan providers may not accept this scenario.
Thanks a lot Sreekanth for your response.
Dear Sreekant
Me and my wife as co-owner(both tax payer-amongst me the max tax payer) purchased an under construction flat with home loan of 2700000/-(twenty seven lakhs) in Jan 2014. The expected possession is in April 2016. The interest paid in year 14-15 & 15-16 was 260000/-(two lakhs sixty thousand) each year which adds upto 520000/-(Five lakhs twenty thousand). Now after my possession in 16-17.
1. Can I claim pre-interest with present interest of around 2 lakhs
2. May I request you to give us best possible interest division among us (me & wife)so we both can take benefit (including pre interest)
Dear Santosh,
Suggest you to go through below article and revert to me if you need more info;
Under-construction property & Income Tax benefits.
Dear Sir,
Am planning to take a home loan. The home loan will be completely paid by me. But the property is both on my father and myself(50:50) share. Can I claim entire tax benefit of principal and interest(irrespective of share of ownership).
Kindly guide how to do this.
Dear Udayakumar,
You can inform your banker (loan provider) abut this and request them issue loan certificate (statement) on your name only.
You should enter into a simple agreement with the other borrowers stating that you will be repaying the entire loan.
Thanks for the reply.
Hallo sir I have one query
Me and three of my friends all are working in merchant navy planned to buy one property that can be divided into four part with some common areas is it possible to get a loan for this
Dear Muthukumar..It is very tough to get joint-loans if the applicants are friends.
Dear Sir,
If I buy a joint property with my wife and
1. The first co applicant is my wife and I am the second co applicant for the loan.
2. The first owner of the property is my wife and I am the second co owner.
3. The full EMI and loan will be cleared by me that is the husband. Can I take the full tax benefit for the same provided no EMI is paid by my wife and she doesnt even claim tax benefit
Dear Dinesh..You can do so but inform your loan provider about this, so that they can issue loan statement for the entire EMIs on your name only.
Hi Sreekanth
My wife and I are co-owners and co-borrowers of a property, the deduction is being done only from her account as she is the first owner, though we share the EMI payment. Can we both claim income tax exemption on the interest portion ?? or should there be debit from account also to claim the exemption ?? also is there some agreement we need to make to prove how much share each of us are paying in the EMI portion ?? or is it considered 50:50 by default ?? what is the procedure to claim diff ratios like 60:40.
Thanx in advance
Satya
Dear satya,
50:50 is by default. If you have to make it to 60:40, you can inform your loan provider about the same and request for issue of Loan certificate accordingly.
Suggest you to make loan-payments from a joint-account.
thanx sreekanth, for the information and immediate reply, one more doubt, we have registered the flat in month of september, but yet to move, as we have not got NOC to occupy the flat, but from bank side EMI has started as full disbursement is done, can we claim IT exemption in this case ?? we won’t be claiming HRA, if yes, what documents do we need to submit apart from provisional certificate.
Thanx
satya
Dear satya,
You can claim tax benefits after taking the possession of the property only.
Kindly read:
Occupancy certificate & completion certificate : Importance.
Under-construction property & Tax implications.
Investment proofs to be submitted to employer.
dear sir,
My spouse own a house and we went for home extention loan for Rs.2250000. since she was not working at that time i was the borrower and she became co-borrower. Now she is working in govt. dept. Shall i share the tax exemption benefits ( I am the borrower and not the co-owner)
Dear manoharan..You need to be a owner / co-owner of the property to claim tax benefits.
Dear Sir
I am a co-borrower of a Home but I am not the co-owner of that house,My father is the owner of that house.Loan Priniciapl and Interest are being paid by me through Bank each months it getting deducted from SBI.Can I Claim these in IT Refund.
Dear Jyotiprakash..You have to be either owner or co-owner of the property to claim income tax benefits on home loan.
Hello sir,I want to make my wife as co owner of a flat yet to purchase.can I avail a home loan jointly and total emi will be paid by me as my wife is a house wife.so that if my wife gets a job she can claim IT
Dear Chaitanya..you can make her as co-owner and co-borrower too, if she has plans to work & earn.
Dear Shreekanth,
Say I am contributing 2Lakh per year for the home loan through EMI. My coapplicant is also paying the same.
Is it possible for me to consider my entire contribution as an interest and claim it under section 24 as I have already done other investment of 1.5L for 80C.
Dear Parth,
Kindly read : IT benefits & home loan.
Is this a self-occupied house? Is co-applicant a co-owner too?
Dear Sir,
I and my friend have jointly purchased a 200 sq.yrds plot. Now we are planning to construct aG+1 house. We are planning to take in such a way that ground floor for my friend and first floor for myself. We have approached the bank for loan. But bank is saying that we cannot apply jointly for that loan as we are not blood relation. They were also asking that how can you show me legally that this floor is yours and the other floor is your friends. Now we are not able to understand how to deal with this. So please help me out.
Dear Praveen,
Yes, as mentioned in the article, generally friends or unmarried couples living together are not allowed to take joint housing loans.
Which bank did you approach?
Check with NBFCs like DHFL, LICHFL etc.,Suggest you not to enquire by visiting the branches but to call their customer care first and then visit. Too many enquiries for home loan might affect your Credit Score.
my wife and myself are co purchasers of house( 50-50 share ) and both are employed.- both tax payers. but myself only takes house loan from sbi. is it possible to have tax benefit for both of us 50 -50
Dear xavier..If she is not the co-owner of the property then she can not claim tax deductions on home loan EMIs, though she is a co-applicant to loan.
Sir, I purchased a land through loan in my own salary, then I take homeoan to construct the house with my wife, wife is co applicant, she is also working, but she is not co applicant in the property she take home lone rebate in loan for construction and I take the land of cost. Is it mandatory to take tax benifits the property was jointly purchased. In this case what we can do
Dear prakash,
If your wife is not co-owner of the property, she is not eligible to claim tax deduction on Home loan EMIs.
You may transfer ownership share (may be say 50%) to her through a Gift deed. You have to contact and inform about this to your banker.
Dear Sir,
I and my brother needs to book 2 BHK underconstruction house in mumbai
Can we take joint home loan ?
What to keep in mind while purchasing(booking) flat with builder and (legal documents) for builders (in the allotment letter for example or others)
Can you please suggest some good banks who can give joint home loan for brothers.
Thanks in advance,
Nitin
Dear Nitin,
You can take joint home loan. Are both of you planning to own the house? (co-owners)
Kindly go through below articles;
6 things to do while buying a property.
Under construction property & Tax benefits.
Importance of Occupancy certificate.
Hi Sreekanth,
In a financial year if I am taking a loan for an under construction property and in the same year I am doing registration and in the same year if I get the possession. Can I get the tax exemption for the principal, interest, stamp duty, registration in the same financial year ? What are the proofs needs to be submitted for the same ?
Thanks
Shashank
Dear shashank,
Yes, you can claim.
Payment of stamp duty,registration fee & repayment of Principal qualifies for deduction under section 80C of the Income-tax Act, 1961, within the overall limit of Rs.1.5 lakh.
Interest amount u/s 24.
Kindly read:
Under construction property & Tax implications.Income from house property & Tax benefits.
Hi Sreekanth,
Thanks for the wonderful article. I have a query please.
If I and my wife have taken a loan in 80:20 ratio and the total interest for the year is Rs 4 lacs, then can we still claim tax benefit on Rs 2 lacs each? Or will my wife (with 20% share) be able to avail only 20% of 4 lacs?
Thanks much.
Dear Ashish,
She can claim only 20% of EMIs as tax benefits.
What is the ownership ratio in your sale deed?
Hi Sreekanth,
Thanks much for your response. I haven’t taken a loan yet but I plan to buy a property in near future and wanted to understand how the tax benefits work. So mine was just an example scenario.
So in my example above (where the interest component for the year is Rs 4 lakhs), do you mean that if my wife is a 20% co-borrower, she can’t avail tax benefit on the interest of 2 lakhs? I understand that I will be able to make Rs. 2 lakhs tax-free in my case, but in my wife’s case only 20% of 4 lakhs = Rs 80,000 can be made tax-free?
Thanks again for your priceless help and guidance!
Dear Ashish,
Are you going to occupy the property? Or will it be let-out?
I am not planning to occupy it right away. Hope to rent it out. But please do tell me the benefits in both the cases.. if I rent it out and if i do not rent it out.
Thanks much.
Dear Ashish,
Your understanding is correct.
Self occupied : Rs 2 Lakh : Rs 80
Let out : Rs 3.2Lakh : Rs 80
thanks srikanth for such nice article. gud job keep it up.
Thank you dear Chandu, keep visiting 🙂
Hi
Me and my husband are looking to buy a house together. Both of us are working. While he’s in India, I’ve recently moved to the UK. I plan to be here for the next 6 months. I will be giving him POA to sign the agreement on my behalf, but when it comes to the home loan, can he take an individual loan and then convert it to a joint loan when I return? If that is not possible, what are the documents required from my side given that I am not in India? Will this affect the timeline for the bank to approve the loan? If so, is there a provision that the builder should wait for the approval from the bank before setting a grace period for payment?
Dear Tejasee,
Once the loan is availed by you husband , your banker normally will not have any objection to convert the individual home loan into a joint loan. Both of you can claim tax benefits in future as both of you are the co-owners of the property.
But applying individually can affect the loan amount eligibility criteria (quantum of loan amount).
Hi Sreekant ,
First of all I thank you, the blog on joint housing loan tax exemption article was really awesome explanation.
I have some doubts regarding claiming tax and documents need to submit. me and my father took joint home loan. I am a co-borrower but not a co-owner. property is in my dad name
From your blogs it clearly tells me i should be co-owner of property to claim tax benefits. For this we approached the municipality office to include my name along with my father name.
So my query is
1) is that enough for the proof to submit or do i need to do anything else?
2) Can i alone claim entire tax exemption amount?
3)documents needs to be submit i)letter from bank and ii) co-ownership document. or do i need any additional certificate?
Hoping for the answer 😉
With Regards
Vinay hunachyal
Dear Vinay,
You need to get your name registered in the “Sale deed”. You can then enter into a simple agreement with your father stating that you would be paying the entire EMIs (you have to inform about this with your banker). After that you can claim tax benefits.
Hi,
Situation : Me and my wife both are working. However, my wife is on maternity leave and from past four months she is on loss of pay and she is not getting pay. When I am going for loan, I am adding her has co-applicant, however the borrowing is going to happen only based on my income. She is just a co-applicant.
Q1. Can I register the property in my and wife name
Q2. When she join back, can she also claim the Tax benefits
Q3. Though the EMI will be paid by me, in the bank certificate both name will be there as she is an co-applicant, Can she show this as a proof and take the tax benefit.
-Vijay
Dear Vijay,
1 – Yes, you can register. Consider mentioning the ownership share (ratio) depending on the expected / current incomes.High ownership share for higher income person to claim higher tax benefits.
2 – Yes
3 – Yes.
My situation is similar. However, Can we both of u shows the full interest under 24(C) and Principal. (or) it goes by share. As of now we do not have any share agreement and I suppose by default it will be 50:50. What document needed which showing this.
Dear Kumar..Sale deed / Gift deed.
can my mother and my wife become applicant and co applicant with my wife reaping the benefit of the home loans
Dear shubhrata..on whose name(s) the property is?
Dear Sreekanth,
We have two brothers. My father took home loan and made my younger brother as co-applicant. But all the EMI is paying by my father only and I also helps him for paying a good money to reduce the loan. The loan age is near 10 years. During registration by brother as co-applicant presence was compulsory as per builder and he also signed the documents along with my father.
So I want to know is the co-applicant signing document is necessary during registration amd will I be the legal hair of this property.
Regards,
Mahendra
Hi,
The property is in the name of my father, but i’m a co-applicant . Can i avail tax benefits . Is it compulsory that the the co applicant to be a co-owner of property to avail tax benefit.
Regards,
Karthik
I am widow and having no children. My income is monthly family Pension, FD interest and rent income from my own old flat. The old flat is in my single name after death of my husband.
My only relative is my younger sister. I am living with her at her home.
I purchased another new flat and the full payment is made by me only, sale deed not yet done. There is no bank loan for this flat.
My question is – in Sale Deed can I (as first holder) enter my sister as a co-owner (as second holder) of the new flat purchased by me?
Please note that this year (July-2015) my sister has purchased a new flat in joint-name with her husband as co-owner. They jointly taken bank home loan. She has income from job work of sewing-tailoring and computer typing at home. Her husband doing job in a private company.
Is there any problem to my sister for her home loan interest benefits?
Me and my wife co-owner of the property which we have purchased through home loan (joint) for which we both are co-borrower.
Till date Home Loan EMI paid by me only. Interest Certificate does not reflect name of my wife. Me and my wife both are working in two different Organizations.
1) We don’t have any % of Share Agreement, then can we both claim tax deduction UNDER SECTION 24?
2) What is the procedure to claim Tax exemption for the both?
Dear Sujit,
You can ask your Lender to include your wife’s name too and issue the ‘interest certificate’ for her portion of ownership (as she is a working lady).Afterwards, both of you can claim the tax benefits subject to Aggregate limits.
can i and my brother-in-law can take home loan jointly…
Dear Sumit..Kindly check with your banker.
ME AND MY HUSBAND TAKEN A JOINT HOME LOAN. WE BOTH ARE CO-OWNER AND CO-BORROWER, BUT EMI PAID MY HUSBAND ONLY. INTEREST STATEMENT MY AND HUSBAND NAME IS THERE. WE DONT HAVE ANY % OF SHARE AGREEMEN, THEN CAN WE BOTH CLAIM TAX DEDUCTION UNDER SECTION 24
Dear Pravina..Yes you can but subject to the applicable ‘aggregate limits’ under section 24.
Are you employed / a tax assessee? Do you have source(s) of income?
Dear sir,
i purchased a duplex on me and My wife’s name.
In registry paper their is no statement like % of Share between me and my wife.
infect the EMI solely paid by me.
My wife has no income as she is a housewife.
The house is self-occupied.
Now while filling income tax return (ITR 2A) in House_Property
Sheet is asks for the “Is The Property co-owned” and % of share. in this
my queries are:
1. Is my wife a co-owner of the property?
2. if so then what will be the % of share.
3. by default if i show 50-50 %, will it effect rebate on housing loan for me.
4. can i clam tax benefit on complete re-payments (principal and
interest). as i’m paying full EMI.
5. when i’ll put the property on rent and will have some income, whose
income will it be?
6.Any return form required to be filled for my wife?
Dear Prashant,
1 – She is a co-owner as the Title deed has her name.
2 /3/4 – If you are paying the entire portion of EMI, you alone can claim tax benefits.You can enter into a simple agreement with your Spouse stating that you will be repaying the entire loan amount.Kindly inform and check with your banker about this.
5/6 – If you have a jointly held property, the rent received from it will be taxable in the hands of each co-owner based on the respective shareholding. “The rental income will be distributed among the owners based on the proportion mentioned in the purchase deed or agreement. Further, if there is a housing loan, the proportion in which the loan has been taken should be the same as the proportion in which the property is jointly owned. These are general conditions.
But, if you are claiming the entire tax benefit, suggest you to include the rental income (if any) on your name and file your Taxes accordingly.
Dear Sreekanth,
My issue is similar to Rupesh’s. We both are co borrowers but not joint owners. The house is not mortgaged with the Banker. Can I register a gift deed of 50% of the property to my wife to avail tax benefit as both of us are Salaried Taxable employees?
Dear Ravi,
If the house is not mortgaged (homeloan) then how can you avail the tax benefits?
Dear Sir,
I haven’t got your point. LICHFL is the banker. They have given the loan for purchase. The documents are with them. Apart from that there is no mortgage process involved.
Dear Ravi..You can register Gift deed by making your Spouse as the co-owner for a portion of your property. But, kindly check with your banker or loan provider about this and go ahead.
Thank you Sreekanth!
Dear Sir,
Recently we purchased a property which is registered in the name of my wife, who is home maker. I took home loan in which, my wife is co-borrower.
Now, I can get tax benefit on which, because, I am not co-owner. Now, what can I do, so that I can get tax benefit. The Possession of house we will get in next 2 months (Oct, 15).
regards
Rupesh
Dear Rupesh,
If you are not a co-owner of the property , you can not get tax benefits from home loan.
You can get ‘gift deed’ done by your wife up mentioning the share of ownership in the property.
Suggest you to talk to your banker if this is ok with them. You may have to prepare new Mortgage deed with your banker.
Hi,
I think my question is more relevant under this post.
If the rental income is less than exempted slabs do we required to lodge returns with “Zero” return? If yes, Which ITR to be used? ITR1 do not have section 24.
Thanks,
Chaitanya
Dear Chaitanya,
Do you have any other source of income (interest income from FDs/bank acs/agri income etc.,)
You can show the loss from house property under ‘income from house property section’.
Kindly read my article : NRI taxation rules.
Thanks for reply Sreekanth.
No other income. Rental is the only taxable income in india for FY14-15. Should i file returns with zero value? Because equally divided income will be less than 240000.
Regards
Chaitanya
Dear Chaitanya,
If your gross income is less than the basic exemption limit, filing of ITR is not required.
(It is mandatory for a non resident to file return of income if his income exceeds basic exemption limit. In your case, since there is no other income, it falls below the basic exemption limit. Thus, you are not obligated to file an income tax return.)
Dear Sir,
My and my wife have taken a joint home loan and also are co-owners of the property. Since I am in a higher IT slab, I am splitting the contribution as 80% in my favor and 20% for my spouse.
However, she will be changing her job in this year and also entering a higher tax slab. Because of which , I would like to now change the contribution to 60 and 40 ratio. Is this possible?
What steps are involved in getting this changed.
Kind Regards
Amit Sood.
Dear Amit,
I believe that this is possible, you need to talk to your banker and submit the required Agreement.
Kindly share the update here and let other too learn from your experience.
Hi Srikanth,
Right now my retired uncle( spouse father) is a owner of house in Blr. Now me and my wife want to construct first floor on that individual house. Property is neither on my wife’s name nor my name. But on her father name. So can we get joint home loan now. If not, what steps can we take to get joint home loan. Pls suggest.
Thanks & Regards,
Sivaram
Dear Sivaram,
Three of you can apply for joint-home loan but both of you can not claim any tax deductions as you are not the co-owners of the property.
Some Financial institutions may recommend that either of you to be the co-owner of the property (especially your spouse).
Dear Sir,s,
Kindly clarify this,&oblige,
If A&B are husband &wife &the had taken a home loan on insestral house for construction &self occupied ,huf havaing other income also ,if loan interest is paid out of huf income how this shall be treated being property of huf being ansestrial &loan provided by bank in karta ,s name.
Dear Dharmesh,
I did not understand your query. Kindly rephrase it..