Who will get I.Tax rebate for a Joint Housing Loan?
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April 13, 2012 at 2:46 am #67359
Anonymous
InactiveWe have a plot( jointly). both are employee. want to get housing loan.
Please write:-
1. how we apply for loan either jointly or single?
2. Who will get Tax benefit either husband or wife or both?April 13, 2012 at 3:32 am #71997InactiveRe: Who will get I.Tax rebate?
1. how we apply for loan either jointly or single?
2. Who will get Tax benefit either husband or wife or both?I think, It will better if you apply for housing loan jointly. Both are earning persons so you may take it equal proportions.
But if you take either you or your husband , only you or he will get I. Tax rebate otherwise both.April 13, 2012 at 4:13 am #71998InactiveRe: Who will get I.Tax rebate?
Thanks Taru for the nice topic . Ya, it will be beneficiary also to apply for the loan jointly as both will get the tax benefit upto the maximum limit.
Let me describe it more. Tax benefits will be divided among both of you in the same proportion in which the asset is owned by both. Both can claim a maximum tax rebate of up to Rs. 1 lakh for principal repayment and Rs. 1.5 lakh for interest payment. Interest paid on the loan is eligible for a deduction from the taxable income of the individual under Section 24 and return of the capital of the loan up to Rs. 1 lakh is included in the benefit under Sec 80C. For claiming your rebate, it is best to procure a home sharing agreement, detailing the ownership proportion in a stamp paper, as legal proof for ownership. To get the best out of the tax savings, it is good to let the partner with the higher pay make a higher contribution towards loan for better tax benefit.April 13, 2012 at 7:25 am #71999InactiveRe: Who will get I.Tax rebate?
Nice topic indeed!
I agree with Som’s comment above. However, the housing loan company always insist on a co-borrower when one apply for a home loan, else one has to sign somebody as a guaranter when one is applying for a home loan. I do not know the legal aspect of the issue but this is the ground reality.
On the other hand, there is a positive side to have a co-borrower, if he/she has a regular income. His/her income will be added to calculate the total loan eligibility. In other words, one will be eligible for higher amount of home loan if the co-borrower has steady income. So, one can buy a bigger or more luxurious home with the additional loan amount.
On sharing the IT benefit between co-borrowers, there is a practical problem: the Home Finance Company issues IT certificate (provisional and final) once every year in the name of the first borrower only. So, to take the benefit of IT deduction proportionately, when the 2nd borrower submits this certificate to his/her employer, the employer, in my experience, tend not to honour it as this certificate is issued in the name of 1st borrower (who might be employed in some other organisation) for the whole amount. In ignoring so, the employer can not be blamed because there is no guarantee that the first borrower is not taking the benefit of the whole amount from his/her employer.
What Som has written above may be perfectly valid legally and surely logical but a little cumbersome in practice.
I have seen this problem arising in my personal experience, hence could not resist my comment -
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