A new concept in the form of a joint home loan has emerged for people who were not able to avail a home loan to apply for a joint home loan and get an approval. Let’s dwell deep and learn the new concept of a joint home loan, what benefits does it have to offer and how you can claim tax benefits on these joint home loans.
What is a joint home loan?
A joint home loan is a loan which can be obtained by an applicant along with his or her parents, partner or siblings. Buying a property requires a vast amount of money. If you don’t not earn enough to qualify for the house loan individually, then you must opt for a joint home loan. Let’s look at some of the factors that need to be considered while claiming tax benefits on property as well as tax benefits which can be claimed on joint home loans.
Factors to consider when claiming the tax benefits on the property
- You must be the co-owner in the property: To claim tax benefits for a home loan, you must be the owner in the property.
- You must also be the co-borrower for the loan: Apart from being the owner, you should also be an applicant as per the loan documents. The owners who are neither borrowers and the ones who do not contribute to the EMI are devoid of any tax benefits.
- Construction of the property must be complete: Tax benefits on the house property can be claimed starting the financial year in which the construction of the property is complete. However, tax benefits are not available for an under-construction property.
Tax benefits which can be claimed on joint home loans are as follows:
There are two types of tax benefits which can be availed against a joint housing which are mentioned below:
- Interest that is paid against the home loan has the eligibility for a tax deduction for up to Rs. 2 lakhs for every year of the repayment term, from income of the individual. This provision is available through Section 24 of the Income Tax regulations.
- Tax exemption is available on the repayment of the principal amount of loan up to Rs. 1.50 lakhs.
Entire tax rebate should be planned in such a way that both owners can benefit from the provision, so that complete repayment amount can be utilized for tax benefits for both individuals.
So, tax benefits on the joint home loans can be availed by all the joint owners, provided certain conditions are met. The information is as per a report by a finance and investment services company engaged in home loans, housing finance and finance advisory. If you are looking to buy property in Mumbai, there are many upcoming Hiranandani projects in Mumbai. Hiranandani Fortune City is an integrated township project that offers property options such as 1, 2 and 3 BHK apartments. Other developers such as Hiranandani Builders have also developed few residential projects.