Benefits of Joint Home Loan: Tax Savings and More


Many people dream of owning a home, and achieving this dream often involves hard work and dedication. Most individuals save a portion of their salary each month to prepare for purchasing a home.

Once they accumulate enough savings, they apply for a home loan from a bank or non-banking financial company (NBFC).

If approached differently, this process can yield significant tax benefits. For instance, if a husband and wife apply for a joint home loan, they can experience greater financial comfort and convenience in the long run. Let’s explore the benefits of a joint home loan.

Benefits of a Joint Home Loan

Couples: A husband and wife can take out a joint home loan, sharing the repayment burden. This collaboration can ease the financial strain of home ownership.

Higher Loan Eligibility: When applying for a home loan together, banks consider the income of both partners. If both individuals are employed, they may qualify for a larger loan, enabling them to purchase a better home.

Shared Loan Liability: The monthly EMI (Equated Monthly Installment) for a joint home loan can be divided between the couple, either equally or according to their respective salaries. Both partners need to plan this together.

Tax Benefits: Since the couple has jointly taken a home loan, both can claim tax benefits separately, doubling the available tax deductions.

Additional Benefits for Women Borrowers: Many banks offer a reduced interest rate, typically between 0.05% and 0.1%, if the woman is the primary borrower.

It’s advisable to check with the bank before taking the loan. Additionally, in some states, women applying for home loans may receive reductions in stamp duty, lowering the overall cost of purchasing a home.

Tax Benefits Under Sections 80C and 24B

Couples applying for a joint home loan can also benefit from various tax advantages under Sections 80C and 24B of the Income Tax Act:

  • Under Section 80C, each spouse can claim up to ₹1.5 lakh on the principal amount repaid during a financial year.
  • For interest payments, a couple can claim up to ₹2 lakh under Section 24B of the Income Tax Act if they reside in the same property. If the home is rented out, there is no limit on the interest that can be claimed.

By leveraging these tax benefits, the couple can save up to ₹7 lakh annually.

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