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tax exemption on joint home loan

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Question:are planning to take a House loan jointly (father and me). The property is owned by father only. In this case will I get tax exemption?

Answer:Hello Velayudhanraj, As per the income tax guidelines only the co owners are eligible for tax exemption in respect of home loan repayment. In your case your father being the sole owner of the property, the tax benefits will be available only to your father. However, you can reap the tax benefits, provided if your father declares you to be a co owner legally by entering in to an agreement. This way you will become the co owner of the property and can avail the tax benefits in proportion to your share of ownership
For Example,

Cost of the House property: Rs 10,00,000
Ownership share: 60% (Father), 40% (Son)
Loan: Rs 6,00,000

Amount to be brought in by Father: Rs 6,00,000
Less actual contribution by Father: Rs 2,00,000
Father’s share in the loan: Rs 4,00,000

Amount to be brought in by Son: Rs 4,00,000
Less actual contribution by Son: Rs 2,00,000
Son’s share in the loan: Rs 2,00,000

Interest payment: The maximum limit of Rs 150,000 on interest paid will apply individually to both (i.e. the total deduction will be limited to Rs 300,000).

Principal repayment: The tax benefits on the principal will be shared in the ratio of 2:1 between the Father and Son since that is the share of the loan for Father and Son. The limit is Rs 100,000 for each.


The Yogi

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