What are the Tax Benefits of Availing a Joint Home Loan  

In India, most people rely on getting a house loan to get the funds for buying their dream home. And, while you can apply for a loan individually, you can also consider a joint home loan to get a higher amount and enhance your eligibility. Additionally, when you apply for a joint home loan, you and the co-applicant can enjoy valuable tax benefits separately; it is a great way to reduce your overall annual tax liability. 

However, to enjoy maximum tax benefits on a joint home loan, you must be aware of the various tax provisions and the benefits guaranteed under different sections of the Indian Income Tax Act. 

One of the critical prerequisites to avail tax benefit on a joint home is that you must be a co-owner of the property you buy. This means, the property must be registered in your name. Let us look at other conditions for getting tax benefits on joint home loan in Mumbai

Apart from being the co-owner of a property, you must be a co-borrower of the loan according to the loan documents. Also, you must contribute to the loan repayment to get the tax benefits. As per the Indian tax laws, people who sign as a co-borrower but do not contribute to the loan repayment cannot get tax benefits on a joint home loan. 

If you have applied for a joint home loan for purchasing an under-construction property, you can get the tax benefits only from the years after the construction is completed and you get property’s possession. You or the co-applicant can’t get tax benefits during the construction period. 

Tax benefits on joint home loan

If the property you buy is self-occupied, then under Section 80 C of the Indian Income Tax Act both you and your partner can be eligible to get a tax benefit of up to Rs. 1.5 lakhs in a financial year on the repayment of the principal amount. This means together you can get a tax benefit of Rs. 3 lakhs in one years. 

Additionally, you and the co-borrower can enjoy tax benefits of Rs. 2 lakhs individually on the repayment of home loan interest amount. The deduction is guaranteed under Section 24 of the IT Act. 

An important thing to know about getting tax benefit on the interest repayment is that the total interest repaid is allocated to each co-owner based on the ratio of the property ownership. This means the total deduction you can get cannot be more than the total interest you have repaid. 

Let us understand this calculation with an example. 


Let us assume Mrs Khan and her spouse borrowed a home loan and they repaid a total of Rs. 4,50,000 in interest repayment together in a financial and they share the property ownership in 50:50 ratio. In this case, both the applicants can claim tax benefits of Rs. 2,00,000 each.

Final Word

Thus, applying for a home loan gives you the flexibility to get a higher loan amount and allows you to enjoy higher tax benefits. So, when you apply for a home loan, ensure that you know about the different tax provisions on joint home loans and take maximum advantage of it. 








Lawrence Streeter