Besides the benefit of getting lower home loan interest rates, borrowers of a joint home loan can also claim tax deductions under the IT Act. These joint home loan tax benefits can be claimed by all co-applicants individually, so long as the total deduction doesn’t exceed the actual loan amount repaid.
For this reason, the ownership of both applicants should be clearly stated in the home loan documents along with the percentage of ownership. Based on this ownership ratio, the proportion of the tax exemption is determined. In any case, every applicant of the joint home loan enjoys a maximum tax deduction of up to Rs. 1.5 lakh on the principal repayments and up to Rs. 2 lakhs on the interest repayments made in a given financial year.
Also read: Tax benefits on home loan