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Income Tax · ReturnsJoint home loan tax benefits: co-owner and co-borrower examples
Buying a home jointly with your spouse or parent can double the tax benefit on the home loan – but only if both are co-owners and co-borrowers and both pay the EMI. Here is how the deductions are shared, with examples for self-occupied and let-out property.
A home loan gives two tax benefits in the old regime: deduction of interest (Section 24(b) of the 1961 Act; Section 22(1)(b) of the 2025 Act) and deduction of principal within the ₹1.5 lakh limit of Section 80C (Section 123 of the 2025 Act). When the house is bought jointly, each co-owner can claim these separately – effectively doubling the benefit.
Conditions for each co-owner to claim
- Co-owner of the property (name on the sale deed).
- Co-borrower on the loan.
- Contributes to repayment – EMIs from their own funds (joint account or proportionate transfers).
- Claims in proportion to ownership share, unless specified otherwise in the deed.
Limits per person
| Benefit | Self-occupied (old regime) | Let-out (old regime) | New regime |
|---|---|---|---|
| Interest | Up to ₹2,00,000 per co-owner | Actual interest; loss set-off against other income capped at ₹2,00,000; balance carried forward 8 years | Self-occupied: nil; let-out: allowed only against that rent, no set-off or carry-forward |
| Principal | Within ₹1,50,000 (80C / Sec 123) | Within ₹1,50,000 | Not allowed |
| Stamp duty & registration | Within 80C in year of payment | Same | Not allowed |
Example 1: husband and wife, self-occupied
Example: Rakesh and Meena buy a flat in Rohini Sector 24 for ₹1.1 crore, owned 50:50, with a joint loan. Annual interest is ₹6,40,000 and principal ₹1,60,000, paid equally from their salaries. Both are in the old regime.
| Rakesh | Meena | |
|---|---|---|
| Share of interest | ₹3,20,000 | ₹3,20,000 |
| Interest allowed (cap ₹2 lakh) | ₹2,00,000 | ₹2,00,000 |
| Share of principal | ₹80,000 | ₹80,000 |
| 80C available (if other 80C below limit) | ₹80,000 | ₹80,000 |
Together they claim ₹4 lakh of interest, against ₹2 lakh if the house were in one name. At a 30% slab, that is roughly ₹62,400 more tax saved per year.
Example 2: same flat, let out
If they rent the flat out for ₹30,000 a month:
| Each co-owner | |
|---|---|
| Rent share (₹3,60,000 × 50%) | ₹1,80,000 |
| Less 30% standard deduction | ₹54,000 |
| Less interest share | ₹3,20,000 |
| Loss from house property | ₹(1,94,000) |
| Set off against salary (old regime, cap ₹2 lakh) | ₹1,94,000 |
In the new regime, each co-owner would compute the same loss but could not set it off against salary or carry it forward – it would simply be lost.
Example 3: unequal shares
If the deed shows 70:30 ownership, interest and principal must be split 70:30 – even if EMIs are paid 50:50. Align repayment with ownership to avoid disputes.
Pre-construction interest
For an under-construction flat, interest paid before the year of completion is aggregated and claimed in five equal instalments from the year of possession. For a self-occupied house, these instalments are within the ₹2 lakh limit per person.
Other points
- Possession within 5 years: for a self-occupied house, the ₹2 lakh limit requires construction or acquisition to be completed within five years from the end of the year in which the loan was taken; otherwise the limit falls to ₹30,000.
- Second self-occupied house: up to two houses can be treated as self-occupied; the ₹2 lakh limit is overall.
- Loan from relatives or friends: interest is deductible with a certificate, but principal is not eligible for 80C.
- TDS on property purchase: each buyer deducts 1% on their share if the consideration is ₹50 lakh or more – see TDS on property.
Documents
- Sale deed showing co-ownership and shares.
- Bank's interest and principal certificate in both names.
- Bank statements showing each person's contribution.
- Completion/possession certificate.
Common mistakes
- Claiming the full interest in one name when the house is jointly owned.
- A parent co-borrower who is not a co-owner claiming deductions.
- Claiming self-occupied interest in the new regime.
- Not tracking pre-construction interest instalments.
Key takeaway
Joint ownership plus joint borrowing plus joint repayment lets each co-owner claim up to ₹2 lakh interest and ₹1.5 lakh principal in the old regime. Check whether the old regime still wins once you add these deductions – our income tax calculator helps, or ask our tax planning team.
Official references
Provisions discussed (summaries in our Law Library):
- Income-tax Act, 2025 – Section 22(1)(b) (corresponds to 24(b)): Interest on home loan
- Income-tax Act, 1961 – Section 24(b) (corresponds to 22(1)(b)): Interest on home loan
Official sources to verify the current text, notifications and circulars:
Frequently asked questions
Can both spouses claim ₹2 lakh interest on a joint home loan?
Yes, in the old regime, if both are co-owners and co-borrowers and both contribute to the EMI. Each can claim interest up to ₹2 lakh on a self-occupied house in their share.
Can a co-borrower who is not a co-owner claim the deduction?
Generally no. Deduction for interest and principal is available to the owner of the property who repays the loan.
Is home loan interest deductible in the new regime?
Not for a self-occupied house. For a let-out house, interest is deductible against rental income in the new regime, but the resulting loss cannot be set off against other income or carried forward.
How is pre-construction interest claimed?
Interest for the period before completion is allowed in five equal instalments starting from the year of completion, within the overall ₹2 lakh limit for a self-occupied house.
Can a father and son both claim interest on a joint loan?
Yes, if both are co-owners and co-borrowers and both repay the loan, each claiming his share within the limits, in the old regime.
What if only one spouse pays the EMI?
The paying spouse who is also a co-owner can claim interest and principal; the non-paying spouse cannot. Courts have occasionally allowed claims based on actual contribution.
Is interest on a top-up loan deductible?
Only if the top-up is used for acquisition, construction, repair or renovation of the house, with proof of end use.
This article is general information on the law as on 10 November 2026, written for educational purposes. It is not professional advice for your case. Section numbers under the Income-tax Act, 2025 should be confirmed with the official section mapping on the Income Tax Department website before use in filings.
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