How To Calculate Income Tax Benefit on Joint Home Loan ? – In the latest budget speech finance minister
has announced that tax incentives limit of deduction on interest paid on
borrowed funds for a self-occupied house would be increased. If this is the
case of Joint ownership, tax benefit also doubles.As per the Income
Tax rule tax benefits on
a joint home loan can be availed by all the joint owners based on the certain
condition which are needed to be fulfilled.
This
is to remember that housing loan buyers can avail the combination
of different deductions and exemptions i.e. deductions under section
80C, 80CCC, 80D, 24(b) for maximize the income tax benefit.
The
EMI i.e. equated monthly installments (EMIs) of a home loan consist of two
parts—interest and capital repayment. Income Tax benefit on capital
repayment or principal parts comes under section 80C within maximum limit of Rs.1.5 lakh a
year. The interest portion comes under section 24(b) and the limit is Rs.2 lakh for
self-occupied house.
Download AutomatedIncome Tax Form 16 Part B For F.Y.2015-16 [ This Excel Utility prepare at a time 50 employees Form 16 Part B for F.Y. 2015-16 ]
Benefit of Joint Ownership
Any
housing loan may be availed in joint ownership as co borrower. The joint
borrower ship of housing loan allows both the borrowers to become eligible to
claim tax benefit against the same house.
For Example : Any housing loan of amounting Rs 40 lakh at the rate
of 10% interest per annum, will accumulate the Interest of approx Rs.4 lakh
in initial financial year. As per the Income Tax law single borrower can have
the tax benefit of Rs 2 lakh each year if self occupied house but in case of
joint borrowership they can together claim Rs.4 lakh. A
big saving for other
investments.
Important
Condition to Met Before Claiming Tax Benefit in Joint Name
Following
instruction must be fulfilled before claiming the Income tax benefit for joint
ownership house.
1.
The house should be registered in the name of both the borrowers.
2.
The share of rights over the property should
also be clearly mentioned in the registry papers.
3.
Based on the share of right of property the division of interest can be claimed
in the same proportion by each co-applicant.
Example : Suppose the ratio of ownership of house is 50:50 , and
housing loan of Rs 40 lacs in the joint name in such condition the loan amount
would be split in the ratio od 20 lacs each and tax benefit on the
interest paid can be claimed based on the loan amount against each co-applicant.
