NEWS & ADVICE : HOME LOANS
Income Tax Benefits on Joint Home Loans
By Joseph Samson
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Only Co-owner gets Tax benefit, not Co-borrower:

In case a person is just a co-borrower of a loan and not a co-owner in the property, he/she cannot claim the tax benefits. On the other hand, if the co-owners are equal owners of a property but if the share of the loan is 2:1, the tax benefits can also be availed in the same ratio i.e. 2:1.

Usually, lenders do not accept split EMI payments i.e. two or more cheques for the same EMI. The EMI in joint accounts can be made through a joint account owned by co-borrowers or by splitting EMIs in a specific proportion of loan share.

Tax benefits on Joint home loans:

The planning in the entire issue has to be done in such a manner that all the joint holders are able to take the tax benefit and no part of the total repayment goes waste.

Advantage for Joint home loan holders is that the co-borrowers can claim the maximum tax benefits individually. This means each holder can get a tax rebate of Rs. 1 lakh for principal repayment under Section 80C and Rs. 1.5 lakh for interest payment under Section 24.

In case of couples where both of them are tax payers with independent income sources, get tax deduction benefits for the same home loan, the maximum deduction in such a case would Rs 2 lakhs on the principal repayment and Rs 3 lakhs on interest payment.

New Direct Tax Code

New borrowers need to keep an eye out for developments in the housing loan sector. While planning any housing loan benefit, they should keep in mind the conditions mentioned in the New Direct Tax Code.

So, purchasing a house with joint home loan would be the best decision as it has twin benefit attached with it, first it will help the borrower to avail larger amount of loan and secondly and most important benefit is tax rebate.


 


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