With a housing loan, you can finance up to 75%-80% of your property purchase. However, the loan amount sanctioned by the lender will largely depend upon your credit score, monthly income, job profile, repayment capacity, etc. In order to qualify for a higher loan amount, you can consider applying for a joint home loan in India. A joint home loan is taken by more than one person and repaid with equal financial responsibility. The co-applicants for the joint home can be family members, including parents, spouse, or children. You can also claim home loan tax benefits by availing a joint home loan.

The tax benefits on a joint home loan are mentioned below:

  • In case of a joint home loan, the co-applicant who is financially more stable and is in the higher income tax slab rate can opt for higher share in EMI payments.
  • Under Section 80C of the Income Tax Act, 1961, each of the co-applicant in the joint home loan can claim a deduction of up to Rs 1.5 lakhs on the principal component of the loan.
  • Under Section 24 of the Income Tax Act, 1961, both the co-applicants can avail a deduction of up to Rs 2 lakhs on the interest component of the loan.
  • The tax benefits can be claimed for ready-to-move-in properties as well as under-construction properties. However, expenses prior to completion of construction are claimed in five equal instalments starting from the year in which the construction is completed.
  • The co-owners of the property can split the stamp duty and registration cost and claim deduction under Section 80C of the Income Tax Act. Payment made towards registration charges and stamp duty are eligible for deduction under section 80C, provided the claim is made in the same year in which these charges are paid. To avail the maximum tax benefits, the co-owners should split these costs and then claim deduction.
  • In case of a jointly owned property, if the interest outgo per annum is more than Rs 2 lakhs, then as a family, it’s possible to claim a larger tax benefit for the interest paid on housing loan.

Lenders are more likely to approve joint home loans due to the shared loan repayment responsibility and it improves your home loan eligibility. Apart from listing your spouse as the co-applicant and co-owner, you can also reduce your tax outgo by purchasing the property jointly with your parents or siblings.

In addition to the tax benefits, it’s essential to learn about the other nuances of a joint home loan before going ahead with it. With a joint loan, you can avail a large loan amount at a competitive interest rate. Moreover, since the repayment burden is shared between the co-applicants, paying off the loan becomes comparatively easier.

In a joint home loan, it’s essential that both the co-applicants are well-versed with the terms and conditions of the loan. This will help avoid any inconvenience or miscommunication at later stages.