Taxpayers claim several types of tax exemptions under the old slab of income tax, out of which home loan is the most attractive option. Shared home loans not only increase the loan amount but also get tax rebate separately. Pankaj Bansal, Vice President, BankBazaar.com, mentions that the claim of tax exemption on home loan is very beneficial for the working couple. On one hand, their eligibility for loans increases and they are ready to pay more money in the bank at a lower interest rate. On the other hand, under Section 24 (B) of Income Tax, individual taxpayers can claim up to Rs 2 lakh on home loan interest and Rs 1.5 lakh tax rebate on principal under Section 80 (C), thus taxing a taxpayer up to Rs 3.5 lakh. Discount is available on home loan. Couples in the same shared home loan can claim it separately in their ITR and the total tax exemption will be around 7 lakh.
Under Section (26) of the Income Tax, the husband and wife’s ownership of the house is necessary for tax exemption on a shared home loan. Both also need a stake in the loan. If you have made a common borrower to increase the eligibility of a home loan, then only the person who will be the owner can claim the rebate. At the same time, both the name of the owner and the loan is mentioned, but if only one person is giving EMI, then the claim of tax exemption will also be given by the EMI. Shared application increases loan eligibility. Banks can offer home loans at a lower rate of interest. In the loan application, if the ownership of both is not written, then they assume 50-50% from the bank.
Suppose a couple bought a house at a wedding and got a loan from the bank in the name of both. Now the distribution of tax exemption is decided on the basis of the down payment and EMI of the loan at the time of purchase of the house on the basis of ride and if both share the down payment and EMI equally, the benefit of tax rebate will also be equal. If this is not done then the person who gives more EMI will also get more discount. However, it cannot be more than Rs 3.5 lakh. At the time of granting the loan, the banks get a MoU from the common applicant for the stake. Once the debt share is fixed, it cannot be changed. That is, if either of them leaves the job or financial crisis comes, then the payment should be in proportion, even if one person is paying the money.
First of all, while purchasing a house, include these two names in the honorship. This will also make it easier for the bank to give a shared loan. Because in the event of a dispute, both will continue to own the property. After this, according to your opinion and tax liability, the loan should also be decided in advance.