Joint ownership can be a partnership between husband and wife, sibling in your family or parents and n number of persons since there is no limit as to how many persons can apply for a joint home loan.
Tax Reduction :
Individuals could claim a deduction for the interest paid on the home loan (for purchase or construction) up to Rs 1.5 lakh, subject to certain conditions – in case of self-occupied house property since the annual value of the house property is considered to be nil. This would result in a loss under the head house property of up to Rs 1.5 lakh which can be repaid from other finances, if any.According to the U/S 80C of the Income Tax Act, 1961, if the property is let out, the actual amount of housing loan interest, without limit, could be claimed as deduction. Also, an individual can claim a deduction up to Rs 100,000 for re-payment of the principal amount.
Joint Benefits :
Consider the following points while opting for your home :
1- The house should be bought in the joint name and proof of co-ownership should be maintained.
2- The housing loan should also be taken in joint names.
The repayment of the loan can be done either by the co-owners paying individually or paying through a joint account, in which both the co-owners can contribute towards the loan payment by depositing the amount as per the proportion of contribution mentioned in the contract.
The proportion of joint partnership is the basis of tax benefits among the co-owners. Apart from tax benefits, having a joint ownership in availing a home can entitle to you for higher benefits as in :
1- A joint partnership consisting of husband and wife, reduce the problems relating to succession issues.
2- Lower property registration fees, if the property is owned by a woman, individually or jointly.
3- Applying jointly for a home loan, can increase the loan amount as the income of all the co-owners will be considered by the financial institutions.