Tips for reducing taxes on a joint home loan – Tax Guide

All co-owners are eligible for the tax advantages connected with the solidarity mortgage under specific circumstances. Let’s look at it. All joint owners are eligible for the joint mortgage tax rebate. It should be emphasized that real estate tax advantages need “ownership” of the property. Even if you cosigned for the loan, you could not be qualified for tax benefits if you don’t own the property.

There are instances where a parent owns the property and a joint loan is taken out by the parent and kid that is solely repaid by the youngster. In this instance, a kid who is not the spouse of the owner is denied the tax advantages of the mortgage.

Any co-owner who is also a co-applicant for the loan may deduct up to Rs 2,000,000 for house loan interest on his tax return in the case of property use. Owners receive a share of the total interest paid on the loan based on the value of their properties. Of course, homeowners’ or borrowers’ total interest charges are limited to the entire interest incurred on the loan.

Consider the scenario where Preeti and her father used credit to purchase a home and paid 4,50,000 rupees in interest. They both own a fifty-fifty share of the property. Preeti may deduct Rs 2,000,000 from his taxes, and her father can deduct Rs 200,000 as well.

For leaseholders, the 2017 Budget has a restriction on the amount of interest that may be written off as a leasehold deduction, up to the extent that the property’s loss does not exceed Rs. 2 lakhs. A deduction for Section 80C principle payments of up to Rs 150,000 may be claimed by each co-owner. This is under the 1,50,000 rupee general cap outlined in Section 80C.

Consequently, you receive a larger tax credit for home loan interest as a family. The property is a common property, and the annual interest cost surpasses Rs 2,000,000. There may be instances where you completely return the debt and the co-borrower is not charged. In this situation, you can deduct the whole interest from your taxes. The co-owners may also deduct stamping and registration costs. To help you optimize the tax advantages of homeownership, we provide a thorough guide.

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