NEWS & ADVICE : HOME LOANS
Joint Home Loan: A wise decision for a double income couple
By Joseph Samson
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HRA benefits

Now that one is already claiming the deductions associated with the property for which a joint home loan is taken, he cannot claim for HRA (house rent allowance) benefits. HRA benefits can be availed by a person for residing on a rented property and since both people already own a property against which the tax benefits are claimed, HRA benefits fall beyond their boundary. However if one person wants to claim for HRA benefits then he has to sacrifice on his share of ownership. Here the deduction on tax can be claimed by the person taking the home loan where as the other can ask for HRA benefits on his partner's property. The Income Tax Act allows a person to claim for HRA benefits on spouse's property.

Although HRA benefits can be claimed but one has let go his ownership share and that makes him ineligible for deduction on home loan. While the rent for which the first partner will get the return will be added to the taxable income of the second partner and therefore it does not make sense to avail HRA benefits at the cost of tax deductions.

Buying a house with joint home loan would be a best decision if both the partners are earning as it will help in availing in larger amount of loan and obviously the double tax benefits.

 


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