JOINT LOAN, GREATER BENEFITS

W7% interest for 20 years. If you bought this house jointly and also borrowed jointly, you can benefit by splitting the EMI proportionately, and take advantage of each co-borrower claiming the tax benefit towards interest payment proportionately. For instance, in the above example in the first year of repayment, the total EMI is Rs 7 .07 lakh of which interest is Rs 5.26 lakh and principal is Rs 1.8 lakh. If there was only a single borrower, the maximum tax deduction under interest repayment component that could be claimed would be Rs 2 lakh. However, if the loan was jointly taken, the interest component tax benefit could go up as high as Rs 4 lakh between the co-owners with equal ownership. In case of the above example, the interest component that each pays for is Rs 2.63 lakh and they can claim Rs 2 lakh individually on this loan EMI and claim the same. In case the ownership is in any other proportion, the interest paid is distributed according to their share in the property. Often borrowers, depending on the income tax slab under which they fall, decide to have proportionate ownership so that the one in the highest tax bracket can claim the maximum tax savings. When going for coownership and co-borrowing for the home loan, try to check the tax benefits you can claim collectively and make the most of it. hen buying a house, you could consider taking a joint loan if you and your spouse are both earning. Joint ownership could also be between father-son, father-daughter and other combinations that are accepted. Doing so increases your eligibility for a home loan, and also enhances your budget to buy a house. Remember, to borrow collectively, you also need to co-own the house for which you are taking the loan. You have the choice to be equal owners or proportional owners in a house and also the loan. The proportionate home owner and borrowing strategy has its advantages, especially when claiming the tax benefits on the home loan. Typically, the home loans are in such a way that during the initial years, a major part of your EMI goes towards interest payment and therefore, home loan gets paid off slowly during initial years. So, it is possible that the interest component of the home loan that you pay is much higher than the Rs 2 lakh limit for tax benefit under Section 24b. Take, for instance, a home loan of Rs 76 lakh at