Homeowners who have applied for a housing credit or those already servicing one can enjoy certain tax benefits. The Income Tax Act of India enables every Indian to take advantage of this facility, and these benefits increase further with joint home loans.

The tax benefits on joint home loan can be claimed by any co-applicant or both as long as the overall deduction is within the specified threshold. But prior to this, applicants should know how they can claim the benefits. 

How to claim tax benefits on joint home loans?

To know the conditions of claiming income tax benefits on joint housing credits, beneficiaries can check the below-mentioned pointers –

  • Concerned property is entirely constructed

The first condition that one should fulfil to avail of a joint home loan is that the property in contention here should be entirely constructed. A point to note here is that individuals are eligible for this deduction from the financial year the property construction is complete.

  • Applicants should be co-borrowers

Claiming the applicable tax benefits on a joint home loan requires co-owners to be co-borrowers as well. Since the income tax deductions are only applicable to those contributing to home loan EMIs, anyone who is not a co-borrower as per loan documents is not eligible for it.

  • Applicants must co-own a property

To avail of the tax benefits advantages of a joint home loan, applicants must co-own the property. However, individuals sometimes opt for this credit instrument without being an owner of a property; thus, they cannot enjoy these tax deductions.

Besides knowing the conditions to meet for a joint home loan tax benefit, one should also learn about the tax exemptions in detail as well.

What are the tax benefits of a joint home loan?

Applicants looking to apply for housing loan, can avail of a few tax benefits. These benefits are mentioned below –

  • Benefits under Section 24 (B)

Beneficiaries can avail of a tax benefit on interest paid under section 24 (B) of the Income Tax Act. To get tax exemption up to Rs.2 lakhs per year, the property should be completely constructed within 5 years of loan sanction. Otherwise, it lowers to Rs.30,000 per year.

Apart from this, benefits are also available under this section for ready-to-move-in properties. However, the tax benefits against housing loans are exempted from any limits for property purchased to let out.

  • Tax benefit under Section 80 C

For self-occupied properties, each co-borrower is eligible for saving tax on the principal component of the EMI. Under Section 80 C, a borrower can have a maximum tax deduction of Rs.1.5 lakh per year. But, beneficiaries should note that this tax cut contributes to allied investments such as Public Provident Funds (PPF) and life insurance. Additionally, this benefit is only applicable if the property is entirely construct and is not sell out within 5 years of purchase. 

Besides this, joint housing loan borrowers might also be eligible for a deduction on stamp duty and registrations. If applicable, this deduction is include within the limit of Rs.1.5 lakh annually, and joint borrowers must be the co-owners of the property concern.   

However, individuals considering to avail joint loan, must note that apart from tax benefits, it comes with additional perks as well. 

  • Higher loan amount 

When an additional income source is add to the application, it increases the loan amount eligibility considerably. Additionally, if two individual takes a home loan in unison, the lending risk for a lender is also on the lower side, thus they usually disburse a higher loan amount. 

  • Competitive interest rate 

Due to lesser risk factor, most lenders offer a lower housing loan interest rate for a joint home loan. Beneficiaries can add their spouses or parents to improve their eligibility and avail of this facility.   

Availing joint home loan has become easy as selected HFCs also offer pre-approved offers that simplify and expedite loan processing. Such offers are available on a range of financial products like loans against property, home loans, etc. Individuals can enter their name and contact number to check their pre-approved loan offer.  

Hence, individuals can keep the above pointers to get a comprehensive idea of tax benefits on joint home loans, which they can implement to their advantage. 

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