Interest on housing loan

Dear Dipjyoti,

The answer based on property holding.  if both are holding property den the appropriate claim will be proportionate percentage of property held.

Hello,

Joint holders can claim the maximum tax benefits individually. This means each holder can get a tax rebate of Rs. 1.50 lakh for principal repayment under Sec 80C and Rs. 2 lakh for interest payment under Sec 24.

The tax benefits are applied according to the proportion of the loan taken by everyone involved in the joint loan. For e.g. if the ratio of ownership is 70%:30% then the loan amount of 50 L will be split as 35 L and 15 L respectively and interest/principal applicable to the respective amounts will be taken into account for each individual taking the loan. For claiming your tax, it is best to procure a home sharing agreement, detailing the ownership proportion in a stamp paper, as legal proof for ownership.

Is the determining factor be the person making the payment?

Yes, If you are only person repaying the loan, you can claim the entire tax benefit for yourself (provided you are an owner or co-owner). You should enter into a simple agreement with the other borrowers stating that you will be repaying the entire loan. If you are paying part of the EMI, you will get tax benefits in the proportion to your share in the loan.

What would be the situation if the payment is made from a joint account?

Joint account – The repayment of a joint loan has to be made from a joint account owned by the co-applicants. Each of them needs to contribute his/her share to the account.