Since home loans are secured loans, they are the most sought-after option for people who intend to buy homes. However, since they are a long-term commitment, it is also advisable that people jointly apply for them. This is because certain joint home loan tax benefits provide financial respite to borrowers.
Read to find out everything there is to know about the tax benefits of joint home loans and how they can provide financial help to borrowers.
Joint Home Loan Tax Benefits
Besides the huge advantage of a low home loan interest rate, a joint loan also offers multiple tax benefits. Here is how people can benefit from them:
Tax Benefits Under Section 80C
Section 80C of the Income Tax Act lets each co-borrower of a joint home loan claim tax deduction on the loan’s principal amount.
Borrowers can get a maximum of Rs. 1.5 lakh deduction per annum. Moreover, this is only applicable to a fully constructed property that is self-occupied.
Tax Saving Under Section 24(b) of the Income Tax Act
Under section 24 of the tax act, individuals can claim a deduction on the interest component of a home loan. A person with a self-owned property can get a tax exemption of up to Rs. 2 lakh per annum irrespective of if it is self-occupied or given on rent.
However, the house’s construction must end within 5 years of starting the loan failing which the deduction amount reduces to Rs. 30,000 per annum.
Tax Benefits Under Section 80EEE
First-time borrowers can avail of an additional tax benefit under section 80EE of the Income Tax Act. It allows an additional exemption of Rs. 50,000 to each borrower on interest repayment.
However, for this, the property value must be less than Rs. 50 lakh and the loan amount should be Rs. 35 lakh or less.
Apart from tax benefits on a joint home loan, they also have other attractive benefits.
Joint Home Loan Additional Benefits
The following are the benefits of taking a joint home loan-
1. Lending institutions offer loan amounts of up to Rs. 5 crore to eligible candidates.
2. Tenor of the loan stretches up to 30 years which gives people enough time to plan the loan repayment.
Applicants can avail benefits of joint home loan from anywhere by filling out an online application.
Lenders provide prepayment and foreclosure offers on these loans at no extra charges.
For getting this loan, an individual has to meet simple criteria and submit some basic documents.
Eligibility criteria and documentation for a joint home loan
Lenders usually specify slightly different criteria for loan eligibility for salaried and self-employed people.
For salaried candidates
For self-employed individuals
Apart from this, loan providers ask for the following documents-
Joint home loan application process
Although people can apply for the loan offline, it is easier to fill out the online form with a few simple steps:
Step 1: Visit the website of the lender and click on ‘Apply Now’.
Step 2: Input your basic details.
Step 3: Provide the OTP sent to your mobile number to verify your identity.
Step 4: Enter the loan tenor and the desired loan amount.
Step 5: Fill in your personal, employment, property, and financial data and click on submit.
Before applying for a home loan, customers must check their loan amount, interest, and EMI through a home loan eligibility calculator that is available on the online portal of the lenders. This reduces the chances of rejection of a loan application.
Besides, various loan providers extend pre-approved offers on home loans and loans against property. These offers streamline the loan application process and facilitate smooth disbursal of the loan.
Borrowers can check their pre-approved offers by visiting the lender’s website and entering their name and other details.
Although there are various joint home loan tax benefits, applicants should carefully check whether they meet the criteria for availing them. This will facilitate better financial planning and streamline the loan process.