A decision to buy an own home is one of the major benchmarks of anyone’s life. However, due to lesser affordability, low CIBIl Score, and other factors, people are unable to realize their dreams of purchasing their own nest.
On the other hand, a sound option in the form of a joint home loan has emerged for people who were unable to avail a home loan to apply for a joint home loan and get an approval.
Home loans in India have seen this new trend of availing a housing finance and not only increasing the home loan eligibility, but even avail home loan tax benefits.
In the same context, let’s underline some of the vital advantages that you can avail in the form of a joint home loan.
Joint Home loan Tax Benefits at a Glance!
Here’s how you can make the most of a joint home loan:
- You could Save Under Section 80C
As per the Section 80C of the Income Tax Act, each of the borrowers enlisted in a joint home loan is liable to claim a tax deduction on the EMI’s principal component. The maximum claim that’s allowed is not more than Rs.1.5 lakhs each year. The exemption also includes your contribution towards other investments such as Public Provident Fund (PPF) and life Insurance premiums and you should know the fact. You can claim the deduction only on a fully constructed house and it should be a self-occupied one. You should always check your eligibility if you want to avail this advantage.
- You could Make Savings Under Section 24(b)
The Section 24(b) of the Income Tax Act also lets you claim deduction for an amount not more than Rs.2 lakhs if your property is self-occupied. An excellent advantage of the joint home loan is that one is eligible to claim deduction on the interest as well as principal elements of the EMI. To be eligible for deductions under Section 24(b), you need to end the construction of the home within 5 years of the starting of the loan. Else, the tax benefits gets reduced to Rs.30,000 per annum.
- You could Save under Section 80EEE
Do you want to avail cheery and icing both on your cake pieceIJ If you are a first-time home loan borrower, you can avail an extra Rs.50,000 as tax benefits on your repayment of the interest under the Section 80EEE of the Income Tax Act. The deductions are available to both of applicants of the joint home loan, but the property’s value need not be more than Rs.50 lakh or less. What’s more, the loan amount should not exceed Rs.35 lakh and you should meet the eligibility to avail the benefits.
Things to Consider before You Apply for Home loan Jointly
If you happen to avail a joint home loan, you need to keep some points in mind to help you make the most of the loan account such as:
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The co-applicant of a joint home loan needs to have a consistent income because you will be splitting the EMIs between yourselves.
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The income of both parties may not be equal, and it’s good to divide property’s ownership depending on the income groups of each applicants.
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Both applicants should have separate life insurance policies.
- In the event of the demise of one applicant, it helps to reduce the home loan burden on the other party.
The Bottom line
If you are planning to buy a home on a joint home loan, it would be better to evaluate and review all terms and conditions first.
A joint home loan helps you share the load of your home loan and hence, you should include only a responsible person as your partner.
Once you avail the joint home loan, you can start claiming the discussed tax benefits and enjoy larger savings gradually!
