Special tax benefits from joint home loan schemes

A joint home loan is a great opportunity for the home buyers as it reduces the financial tension among the borrowers. Moreover, this joint loan scheme also comes with excellent benefits. If you are an owner and one of the borrowers, you can avail these benefits. The financial benefits come in the form of tax exemptions. For instance, a house is owned by a child and his father. The child can utilize the joint loan scheme to enjoy the tax benefits on his income. The child has to be the co-owner of the property.

Conditions to Avail Joint Loan Scheme Benefits

• Owner benefits

As mentioned earlier, the joint borrower has to be the joint owner of the asset. It is only when the borrower is a co-owner; he can enjoy the benefits of tax exemptions from the loan scheme. In the same way, the co-owner of the asset will not be able to enjoy the tax schemes if he is not a co-borrower. You have to be the part of the EMIs paid to the lending institution every month so as to claim the tax benefits as per the clause.

• Property construction

The tax benefits from the joint loan scheme can only be availed if the house or asset has completed its construction. The tax benefits will be calculated from the year of completion of the house asset.

An under construction property will not be eligible for the tax exemptions. Even if the co-borrower is the co-owner, he will not be entitled to the privileges.

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Tax Benefits from Joint Loan Scheme

• IT return exemption

Every co-owner can apply for an income tax exemption amounting to INR 200,000 for the repayment of the home loan money. The co-applicant, who is also the co-owner, will be entitled to tax exemption up to the maximum limit mentioned above.

Another clause also suggests that the amount of tax exemption cannot exceed the interest of the loan. It means that if a loan seeks INR 450,000 interest then the co-borrowers can claim for INR 200,000 each without exceeding the tax interest limit.

• Rented property

The interest on the rented property falls under the clause can be legally claimed for tax deduction. It can only be claimed if the total loss from the properties has not exceeded INR 200,000.

• Principal repayment

As per Section 80C, each of the co-owner can legally claim for a tax deduction ranging up to INR 150,000 for the principal repayment. This amount will not exceed more than the aforementioned figure.

Summing up

A family will be able to take excellent benefits from this clause. The joint loan secured by co-owners in the same family will be entitled to multiple tax exemptions without facing the burden of monthly EMIs for separate houses. Registration and stamp duty charges can be claimed under this act by the co-owners and co-borrowers.

The clauses can be easily explained by a real estate consulting agency. Once the benefits are clarified, it can be availed by the owners of the assets.