Joint Home Loan

Enjoy Tax Benefits of a Joint Home Loan

Joint Home Loan

In the case, a property is jointly owned by you and your spouse and both have similar incomes, you can enjoy the tax benefits of the loan equally.

In the case of unequal incomes and therefore different tax brackets, the partner with the higher income should make a higher contribution towards the repayment. The core idea is to take the maximum advantage of tax benefit on principal paid under Sec 80C and interest paid under Sec 24(b).

Who can opt for Joint Home Loan?

  • Lenders insist upon the co-owners of the Home Loan must be the co-borrowers in the joint home loan.
  • One can team up with the parents or spouse to maximize the benefits of a joint home loan.
  • Even some of the banks allow brothers to take a joint home loan
  • The home loan interest rates might be lowered under some offer valid for joint home loan
  • Banks have restricted sisters, friends, and unmarried couples to choose to join Home loans.

Key benefits of taking a Joint Home Loan

  1. Increase your Loan eligibility: The general norm practiced by Banks is to provide a maximum loan where the EMI is up to 40-6% of the Net monthly income of the individual. In order to increase your Home loan eligibility, a good way is to club the incomes of other family members by making them joint applicants.
  2. All of the co-applicants can enjoy the tax rebates under Section 80C for the principal to be paid and under Section 24 for the interest, to be paid. These transactions are capped at Rs. 1 lakhs for the principal amount repaid and Rs. 1.5 lakhs for the interest paid. It is applicable to every individual; as a result, maximizing the tax benefits on Housing Loan.

If you are your spouse are the equal owners of the property and you both have similar monthly incomes, you can enjoy the tax benefits on the Home loans. If you have different incomes you will come in different tax brackets, the partner with high income can make a higher contribution towards loan repayment.

A person must keep in mind that the tax slabs can change according to the new budget every year. Even the gross incomes can change as well. In this case, the loan amount, to be repaid, will become lesser, and the principal repaid will become high during the last tenure period of the loan.

It is best to procure a home loan sharing agreement for tax purposes giving details of the ownership proportion on a stamp paper. When a person avails a joint home loan, it increases the borrower’s home loan eligibility and maximizes your tax rebate.

In the end, it is the choice of the applicant where to apply for a home loan, a home loan EMI calculator might prove helpful to understand the terms offered by a bank or NBFC.


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