Tax Benefit on Joint Home Loan: If you are going to take a loan for a house, then try to take a joint home loan. A joint home loan can be taken with the wife or any member of the family. Its first advantage is that you can get it easily and at a cheap rate. The second big advantage is that you can avail good tax benefits on a joint loan. If a joint home loan is taken by husband and wife together, then income tax of up to Rs 7 lakh can be saved.
In the case of a joint home loan, both borrowers can claim income tax benefits under Section 80C and Section 24(b) of the Income Tax Act.
Under Section 80C, both borrowers can claim a tax deduction of up to Rs 1.5 lakh on the principal amount. Under Section 24(b), both can claim a deduction on home loan interest up to Rs 2 lakh.
In this way, an applicant can deduct a maximum of Rs 3.50 lakh on the principal amount and interest of the loan and in the case of a joint home loan, both together can save a maximum of Rs 3.50-3.50 lakh i.e. a total of Rs 7 lakh.
A maximum tax exemption of up to Rs 7 lakh will be available on home loans only if both applicants are co-owners of the property and are also registered as co-borrowers in the loan documents.
Also, EMI is being paid on both sides. If you are registered as the owner in the property papers, but your name is not included as a co-borrower in the home loan papers, then you will not get the benefit because being a co-borrower means that the repayment of the loan is your responsibility.
Many times people face difficulty in taking a loan due to poor credit scores, low income and/or other types of debt-to-income ratio. In such a situation, a joint home loan is helpful. In this, the eligibility for taking a loan increases by adding another person along with you as an applicant. If the paying capacity of the other person involved in the joint loan is good then the loan is easily available.
Loan is given to a single loan applicant according to his income. But in a joint loan, the total income of both is considered. In such a situation, the loan amount limit increases.
If you take a joint home loan with a female co-applicant, then you get the loan at a slightly lower interest rate. Many lenders offer different home loan interest rates for female co-applicants. This rate is usually about 0.05 per cent (5 basis points) less than the going rate. But to avail of this benefit, the woman should be the sole or joint owner of the property.
