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How to claim tax benefits on joint home loans

joint home loans

Joint home loans to enhance Home Buyer’s eligibility. The repayment of the loan and claiming of tax benefits on such loans has to be done in a particular ratio. We explain…

Home Loan Council in Hyderabad

The tax laws allow you to avail certain benefits with respect to respect home loans. The benefits are available under Section 24(b) for interest paid and under Section 80C for the principal repayment, subject to certain conditions. Couples usually opt for a joint home loan, as this can enhance their home loan eligibility. However, there is considerable confusion, about who can claim the home loan benefit and how much tax benefit one can claim, with respect to joint home loans.

Co-borrowers vs co-owners

Section 26 of the Income Tax Act, gives clear-cut guidelines, for taxation of your share in the jointly owned property. In case of a joint ownership of any house property, you are taxed as an individual with respect to your share in the property. So, if your share in the joint property is certain or ascertainable, you cannot be taxed as a Body of Individual (BOI) or Association of persons (AOP).

A basic condition for claiming tax benefits, is that you should be a co-borrower of the loan, as well as a joint owner of the property. Unless you satisfy this basic condition, you cannot claim the tax benefits on the home loan. In certain cases, a person merely joins another immediate family member (father, son or spouse), to enhance the loan amount eligibility, without having any share in the property purchased. In such cases, the co-borrower, who is not a joint owner of the property, cannot claim the tax benefits on such home loans. This is one of the reasons that you should buy the property in joint names and then, individually claim the tax benefits.

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Claiming ratio of tax exemptions in Joint home loans

It may also happen that you may be a joint owner, as well as a co-borrower but are not servicing the home loan. In such a situation, you cannot claim the tax benefits on the home loan, as the tax benefits are available with respect to the amounts paid by you.

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The entrepreneur who built ₹1000 cr empire with ₹1 lakh loan

lakh loan
lakh loan

With ₹1 lakh loan the entrepreneur who built ₹1000 cr empire

Industrial Consultant in Hyderabad

Suresh Vazirani was just 21 years old when he gave up corporate career only to work for social causes inspired by the Sarvodaya Movement. The movement contained the collective efforts of Mahatma Gandhi’s followers who worked hard to create a democratic society. Suresh was also associated with Navnirman Andolan, a 1974 socio-political movement that was started in Gujarat which fought against economic crisis and infamous corruption.

One day, an incident at a hospital changed Suresh’s life and it inspired him to become a healthcare entrepreneur. Navnirman Andolan’s Bihar leader Jayaprakash Narayan suffered kidney failure, and he was rushed to a hospital. At the hospital, the imported dialysis machine broke down and the service engineer was unavailable.Since he was a graduate in electrical engineering, he worked on the machine and made it functional at the right moment.

This particular incident made him realise the lives lost each day due to a lack of technical service for medical devices. He also felt the creation of an affordable and easily-accessible medical technology provider was mandatory. The creation of such an organisation was more of a clarion call for service to society rather than the object of a business enterprise. He was already 29, and looking at something to devote his life to, he developed a conviction of improving the healthcare in India thus started Transasia Biomedicals in Mumbai in 1979

Suresh added that he started In Vitro Diagnostics (IVD) company Transasia with just Rs 250 from his own pocket and Rs 1 lakh loan which he borrowed from a friend. All those important funds went into starting operations as the distributor for a Japanese-automated cell counter machines.

In the early 1990s, Suresh set up his own Research and Development and production facilities to manufacture medical equipment like blood analysers. Over the years, Transasia has evolved into a Rs 1,000 crore company. The company offers products and solutions in the fields of biochemistry, haematology, coagulation, ESR, immunology, urinalysis, critical care, diabetes management, microbiology and molecular diagnostics.