A well-planned joint home loan can substantially increase a family's tax savings, with households potentially reducing their taxable income by up to ₹7 lakh annually. According to reports from NDTV Profit, couples can claim deductions under Section 24(b) of up to ₹2 lakh per year on interest paid for a self-occupied property, and Section 80C deductions of up to ₹1.5 lakh per year on principal repayment within the overall ₹1.5 lakh limit for 80C. However, simply taking a home loan jointly is not sufficient - specific conditions must be met to unlock these tax advantages.
To claim maximum tax benefits, couples must fulfill critical legal conditions as reported by NDTV Profit. Both spouses must be co-owners with their names on the property's sale deed or title documents - being a co-borrower alone is insufficient. Additionally, both spouses must actively pay EMIs from their independent income sources such as salary or business income. Tax benefits are directly tied to actual monetary contributions, meaning deductions can only be claimed on the specific portion of EMI payments made from each spouse's separate income. Under the new tax regime, couples cannot claim deductions for self-occupied properties under Section 24(b) or Section 80C if either spouse switches to the new regime.
According to BankBazaar's Ankit Bagadia, couples should avoid blindly splitting home loans equally, as the right EMI contribution depends on who funds the down payment, owns the property, and actually services the loan. If one borrower stops paying due to career break, job loss, or entrepreneurship, the other co-borrower remains responsible for the full EMI - the bank views the liability as jointly owned by the couple. Tax benefits should reflect long-term income journeys rather than current salaries, with higher-earning spouses potentially benefiting more from immediate tax deductions. Removing a co-borrower requires bank approval after fresh credit assessment, and even then, loan liability and property ownership remain separate issues requiring registered sale or transfer deeds.
Filing ITR for home loan tax benefits requires careful documentation and proper reporting. As per recent guidance, borrowers must declare property details under "Income from House Property" and claim deductions for principal repayment under Section 80C and interest under Section 24(b). Possession or completion of construction is required to claim deductions, with interest paid during construction able to be claimed later in five equal instalments after possession. Essential documents include home loan interest certificate, repayment statement, property details, and salary documents such as Form 16. Joint owners who are co-borrowers and contribute to EMI payments can claim deductions separately, thereby maximizing overall tax savings for the family.
