Tax exemption on a joint property

Hi Suyog

The claim of installment repayment benefits shall depend on :

1. Apart from loan, who has funded the property? Have both of you contributed in the same?

2. Who has been paying the EMIs?

Let me know the above for apt answer.

Dear Sir,

- Under Income tax, benefit of home loan interest is provided to the owner as per the Income tax law. Under Income tax law, the person who has financed the property is an owner of the property. If the property was financed by you and your spouse, interest benefit can be claimed in the ratio of investment made by both of you.

- Maximum benefit of interest for self-occupied property is Rs. 2 lacs for each co-owner. If your wife is also paying EMI then she can claim the benefit of Interest.

Thanks

Hi Suyog,

What is important to know is that who has paid for the purchase of the flat and who bears the EMI's. If both of you have contributed towards the purchase and are bearing the EMI in some ratio, both of you can take the benefit of interest deduction in the same ratio.

However if you have paid for these, then it is advisable that you claim the benefit since you are at a higher tax slab.

Hope that clarifies.

Regards,

Nikhil.

Hi Suyog,

Hope you are doing well !

Besides being an owner of property, you must also be an applicant as per the loan documents. Owners who are not borrowers and do not contribute to the EMI shall be devoid of the tax benefits.

Each co-owner, who is also a co-applicant in the loan, can claim a maximum deduction Rs 2,00,000 for interest on the home loan in their Income Tax Return. The total interest paid on the loan is allocated to the owners in the ratio of their ownership. Each owner/borrower can claim interest benefit upto a maximum of Rs 2,00,000. Goes without saying, the total interest claimed by the owners/borrowers cannot exceed the total interest paid for the loan.

Thanks & Regards,

Payal Chhajed

Hi Suyog,

Based on query below are the replies :

1. As you and your wife are joint owners of the property either of the two or both of you(as per the ratio mutually agreed between you two) can claim the Interest paid on the house property.

2. Also it is important to have consistency in filing ITR, i.e. if you have decided the share at 50% each you need to carry forward the same ratio in subsequent years.

3. Tax saving is an important aspect we focus on, and since you fall under higher tax slab without a doubt we suggest you to claim major portion of the interest in your return.

We can also help you in filing your returns and planning your investments!

Hope your queries are resolved!

When a property is is in joint name, usually interest on home loan is shared by co-owners equally. You cannot change the ratio because there is no corresponding clause regarding ratio of share in the deed.

No sir if property in JT name share not mention in sale deed then on payment basis you can claim deduction & have to follow can not change as per your convenience

Dear Sir,

1. Yes, assuming the property was financed by both of you.

2.No, you will have to make consistency in filing ITR.

3.Yes, you claim the benefit as you are at a higher tax slab.

Hi,,

If both are contributing to EMI payment then yes both joint holders can claim deduction.

It is important to maintain consistency in ITR so ratio once decided should not be changed.

Yes ,if your are in high tax bracket then you should claim the deduction.

Hope it helps