How to Claim Tax Benefits on Joint Home Loans in India (2025)

Buying a home is one of the biggest financial decisions most Indians make in their lifetime. And when you take a home loan jointly—whether with your spouse, parent, or sibling—you not only share the loan burden but also open the door to massive tax savings.

In this guide, we will cover everything you need to know about how to claim tax benefits on joint home loans, eligibility conditions, important income tax sections, deductions available, documentation required, and smart strategies to maximize your tax savings.

What is a Joint Home Loan?

A joint home loan is a loan taken by two or more people together to purchase or construct a house. All the borrowers share the responsibility of repaying the loan. Most commonly, joint home loans are taken by spouses, siblings, or parents and children.

It not only increases your home loan eligibility (due to combined incomes) but also helps you save more taxes compared to an individual loan.

Who Can Apply for a Joint Home Loan?

Any two or more individuals can jointly apply for a home loan, but usually, lenders prefer family members. Common combinations include:

• Husband and wife
• Father and son
• Mother and son/daughter
• Siblings (mostly brothers)
• Unmarried couples (accepted by some banks with proper documentation)

Lenders evaluate the income, credit score, and repayment capacity of all co-applicants before sanctioning a joint home loan.

Who Can Claim Tax Benefits on a Joint Home Loan?

Not every co-applicant automatically qualifies for tax deductions. To claim tax benefits, you must meet all of the following conditions:

1. You must be a co-owner of the property
   Your name should be on the property documents (sale deed or ownership title). If you are just a co-borrower but not an owner, you cannot claim any tax benefits.
2. You must be a co-borrower of the home loan
   Your name must be on the home loan agreement as a borrower and you must be contributing towards loan repayment.
3. You must actually contribute to the EMI payments
   The portion of tax deduction you claim should correspond to your actual contribution towards the EMIs.
4. The construction must be complete
   Tax deductions on home loans can only be claimed after the construction of the property is completed and possession is taken.

What Tax Benefits Can Co-Borrowers Claim?

Under the Indian Income Tax Act, co-owners of a property who are also co-borrowers of a home loan can claim deductions under two key sections:

1. Section 80C – Deduction for Principal Repayment

• Each co-borrower can claim up to ₹1.5 lakh per year on the principal portion of the EMI.
• This includes stamp duty and registration charges, but only in the year they are paid.
• Deduction is available only for self-occupied or vacant properties (not for under-construction properties).

2. Section 24(b) – Deduction for Interest on Home Loan

• Each co-borrower can claim up to ₹2 lakh per year on the interest portion of the EMI if the property is self-occupied.
• For let-out or rented properties, there is no upper limit on the interest deduction. However, the total loss under the head “Income from House Property” is capped at ₹2 lakh per annum for individual taxpayers.

Joint Home Loan Tax Benefit Example

Let’s say a husband and wife jointly purchase a home and take a loan of ₹60 lakh. Their annual repayment details are:

• Interest paid: ₹4 lakh
• Principal repaid: ₹3 lakh

If both are co-owners and contribute equally, they can each claim:

• ₹2 lakh deduction under Section 24(b) (interest)
• ₹1.5 lakh deduction under Section 80C (principal)

That’s a combined deduction of ₹7 lakh annually, reducing their joint taxable income significantly.

Pre-construction Interest – What You Should Know

For under-construction properties, you can’t claim Section 24(b) benefits until the construction is completed. However:

• You can accumulate the interest paid during construction (called pre-construction interest).
• This amount can be claimed in 5 equal installments starting from the year of possession.

For example, if you paid ₹5 lakh as interest during construction, you can claim ₹1 lakh per year (in addition to the regular ₹2 lakh deduction post-possession).

How to Claim Tax Benefits on a Joint Home Loan – Step-by-Step

Step 1: Ensure Joint Ownership

Make sure all co-borrowers are co-owners of the property. This should be clearly mentioned in the sale deed.

Step 2: Document Ownership Share

Ideally, the ownership ratio should be specified in the property documents. If not, it is assumed to be equal (50:50 for two co-owners).

Step 3: Get a Loan Statement

Collect the home loan interest certificate from your bank or lender. It should show the split between principal and interest paid during the financial year.

Step 4: Maintain EMI Contribution Records

Ensure that EMI payments are being made from a joint account or traceable bank accounts to match ownership ratio.

Step 5: File ITR with Accurate Deductions

While filing your Income Tax Return, claim the deductions under:

• Section 80C – for principal and stamp duty
• Section 24(b) – for interest

If you’re a salaried employee, submit proofs to your employer to get tax benefits adjusted in your TDS.

Pro Tips to Maximize Tax Benefits

• If your spouse is in a lower tax slab, you can make a larger EMI contribution to save more taxes as a high earner.
• For rental properties, you can claim actual interest paid, even if it exceeds ₹2 lakh.
• If both co-borrowers fall under the highest tax bracket, you can save nearly ₹2.1 lakh per year (30% of ₹7 lakh).

Joint Home Loan for a Second Property – Tax Implications

If you already own a home and take a second joint home loan:

• You can still claim Section 24(b) interest deduction.
• However, Section 80C limit remains ₹1.5 lakh per person, inclusive of all eligible investments.
• If the second home is rented out, the entire interest paid can be deducted from rental income.

When You Cannot Claim Joint Tax Benefits

• If you’re not an owner of the property—even if you pay the EMIs—you can’t claim deductions.
• If you’re not a borrower, but the property is in your name, no benefits under Sections 24(b) or 80C are allowed.
• For under-construction homes, deductions are deferred until completion.

Joint Loan Tax Benefits Calculator

You can use a Home Loan Tax Benefit Calculator to estimate your deductions. Input:

• Total loan amount
• Annual interest and principal
• Ownership share
• EMI contributions

It will show you your personal and combined tax benefit under each section.

Important Documents Required

1. Home Loan Certificate from the lender
2. Sale Deed / Property Documents showing joint ownership
3. Loan Agreement with both borrowers listed
4. Bank statements showing EMI payments
5. Possession Certificate or Occupancy Certificate

What If Ownership Is Unequal?

Let’s say the husband owns 70% of the property and the wife owns 30%. In that case, they should ideally contribute EMIs in the same ratio and claim tax deductions accordingly. This is especially useful if one co-owner is in a higher tax slab.

Joint home loans offer not just financial flexibility but also double the tax benefits, provided you do it right. The key is to ensure:

• Joint ownership and borrowing
• Proper EMI contribution
• Accurate documentation and tax filing

By claiming deductions under Section 80C and Section 24(b) individually, co-owners can significantly lower their tax liability each year while building wealth through real estate.

Key Takeaways

• Claim up to ₹1.5 lakh (80C) + ₹2 lakh (24b) per person per year.
• Must be both co-owner and co-borrower.
• Pre-construction interest can be claimed in 5 equal parts.
• Plan EMI contribution smartly to maximize tax savings.