Tax deductions on joint home loan: What's allowed and what's not
NEW DELHI: Higher loan eligibility is the sole benefit of a joint home loan. It also allows the borrowers to claim tax benefits individually. For instance, a couple can collectively claim deductions of up to ₹4 lakh under Section 24 on the interest.
However, being a co-borrower doesn’t automatically qualify you for the tax benefits. Factors like under whose name the property is registered and from whose bank account monthly instalments are paid play a role in deciding whether both co-borrowers can get tax benefits.
Mint explains these intricacies in frequently asked questions (FAQ).
No, you can’t, as you are not a co-owner of the property. The primary condition to claim tax deductions on home loan interest under Section 24 is that you should be an owner or co-owner of the house on which the loan is taken. Your wife can claim benefits on her portion of EMIs.
This would apply to even situations where parents take joint home loans with their children so that the child can contribute to repaying the loan. If the child is not a co-owner of the house, they can’t claim tax benefits on the loan.
In a joint home loan, all the co-borrowers are allowed to claim deductions on the interest. But the condition is that the co-borrower claiming the tax deduction is paying EMIs, said Karan Batra, founder, Chartered Club.
In the case of joint accounts, it is possible for both the spouses to claim deductions, said Mayank Mohanka, founder, TaxAaram India and partner at S.M. Mohanka & Associates. In the case of a self-occupied house, the maximum deduction allowed is ₹2 lakh per borrower, whereas there is no such upper cap in the case of a rented house. Needless to say, the total deduction claimed should not exceed the actual interest
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