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Benefit of Joint Home Loan and its Tax benefit
Buying a house has always been a bit of financial trouble for many. So, banks come to rescue and aid people with a home loan by facilitating the funding. Two earning members can come together to buy a house and share the loan. Joint home loan is the ultimate way out! Earning members of the family; Spouse, siblings, parent & child either can jointly issue a loan from the bank. This will ease off the burden of loan borrowing. Besides, there is an added major advantage to this joint loan borrowing; the co borrowers can share the tax benefits under the Income Tax Act.
Benefits of joint home loan
  • Two earning members will save a part of their income from taxation
  • The debt burden is minimized as there two people will share the loan
  • Both, Principle and interest payable are exempted from tax under the section 80C and section 24 respectively of the Income Tax Act.
Rules for seeking a joint home loan:
  • A joint home loan can be taken by minimum 2 and maximum 6 members
  • Not all family members are eligible to take joint home loan, generally blood relatives are allowed
  • The lender defines the relationship between co borrowers in order to be eligible to seek the joint loan
  • KYC documents should be submitted that contain identity and address proof of the loan applicants
  • Documents containing the proof of ownership and income proof of borrowers are also required.
Repayment of joint home loan:
  • Either the EMI can be paid via a joint account that is held by the co borrowers
  • Payment made by means of two different accounts for the same EMI is not allowed. However they can share total no. of installments. The payment should come from come from borrowers jointly.
The maximum tax benefit available to a single person who seeks home loan is however 1, 50,000 for each co borrower. Hence it is advisable to get a break up of tax benefits on stamp paper prior to issuing the loan. The agreement will specify the share of the ownership as well as that of the home loan. This agreement will contain the share of the ownership along with that of the home loan issued by them.
The co-borrowers must decide the ratio in which they will borrow the loan. Supposing the ratio decided is 60:40 then the tax benefits availed by them will be in the same ratio. The former can avail a 60% of tax benefit on the maximum permissible exempted limit; while the latter, 40%.
Now, it is way easier and beneficial to manage the funding for your new home by applying for loan. The income tax benefits, plus the lesser burden on a single person, in terms of loan repayment. Also, it enhances your eligibility as a loan seeker because the income of two people is clubbed; the bank finds it convenient to grant the loan.

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