Legal Reference
Section 57 (interest deduction on house property), Section 123 (80C principal repayment), Section 80EEA equivalent (additional first home buyer interest) | ITA 2025 | Both co-borrowers can claim independently
1. Joint Home Loan: Double the Tax Benefits
Taking a home loan jointly with a co-applicant (typically a spouse) allows both borrowers to independently claim tax deductions on the same loan — effectively doubling the tax savings. Under the Income Tax Act, 2025, each co-borrower who is also a co-owner of the property can claim their proportionate share of interest and principal repayment deductions. This is one of the most powerful and underutilised tax planning strategies for families.
2. Conditions for Joint Claim
Both individuals must be:
- Co-owners of the property (names must be in the sale deed/registration)
- Co-borrowers on the home loan (names must be in the loan agreement)
- Actually paying their respective share of EMI from their own income
If only one person is paying the entire EMI from their account, only that person can claim the full deduction — not both.
3. Deductions Available to Each Co-Borrower
| Deduction | Limit Per Person | Section (ITA 2025) |
|---|
| Interest on self-occupied property (old regime) | Rs 2,00,000 | Section 57 |
| Principal repayment (old regime) | Rs 1,50,000 (within 80C basket) | Section 123 |
| Additional interest for first home (old regime, affordable) | Rs 1,50,000 extra (loan taken before 31 March 2022) | Section 80EEA equivalent |
4. Example: Joint Loan Tax Savings
Illustrative only. Rahul and Priya (both working professionals) take a joint home loan of Rs 60 lakh. Rahul pays 60% EMI, Priya pays 40%. Annual interest = Rs 5 lakh; Annual principal repayment = Rs 1 lakh.
- Rahul interest deduction: Rs 5L × 60% = Rs 3L — capped at Rs 2L (Section 57) = Rs 2L
- Priya interest deduction: Rs 5L × 40% = Rs 2L — within Rs 2L cap = Rs 2L
- Rahul principal deduction: Rs 1L × 60% = Rs 60,000 (within Section 123)
- Priya principal deduction: Rs 1L × 40% = Rs 40,000 (within Section 123)
- Combined interest savings (30% bracket): (Rs 2L + Rs 2L) × 30% × 1.04 = Rs 24,960
5. Let-Out Property: No Cap on Interest
For a let-out (rented) property under joint ownership, there is no Rs 2L cap on interest deduction — the full interest (proportionate share) is deductible from rental income. If rental income is insufficient, the excess interest loss can be set off against other heads (up to Rs 2L) and the balance carried forward for 8 years. For joint co-owners, each person sets off their share of the loss.
6. Stamp Duty and Registration Benefit
Stamp duty and registration charges paid at the time of property purchase are also eligible for deduction under Section 123 (80C basket) — includible within the Rs 1.5L limit. Both co-owners can claim their proportionate share. This is a one-time but significant deduction in the year of property purchase.
7. Why TaxClue
Joint home loan claims require careful documentation of ownership share, EMI payment records, and separate Section 123 filing. TaxClue ensures both co-borrowers maximise their deductions. Contact us for home loan tax advisory and ITR filing under ITA 2025.
Disclaimer
This article is for general informational and educational purposes only. It does not constitute legal, financial, or professional tax advice. Readers are advised to consult a qualified Chartered Accountant or tax professional before making any decisions. TaxClue Consultech Pvt Ltd accepts no liability. All case studies and examples in this article are illustrative only and do not represent actual persons or transactions.
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❓ Frequently Asked Questions
Can both husband and wife claim home loan tax deduction?
Yes. Both co-borrowers on a joint home loan who are also co-owners of the property can independently claim tax deductions. Each person can claim up to Rs 2 lakh interest deduction under Section 57 on their proportionate share of interest paid (old regime), and up to Rs 1.5 lakh principal repayment within the Section 123 basket. The key condition is that both must be co-owners (in the sale deed) AND co-borrowers (in the loan agreement) AND actually paying their respective share.
What are the conditions to claim joint home loan deduction?
Three conditions must ALL be met: (1) Both persons must be co-owners of the property — their names must appear in the sale deed and property registration; (2) Both must be co-borrowers on the home loan — both names in the loan agreement with the bank; (3) Each must actually pay their share of the EMI from their own bank account/income. If only one person pays the full EMI, only that person can claim — the other co-owner/co-borrower cannot claim without actual payment.
How is the deduction split between co-borrowers?
The split is typically in proportion to the ownership share or as agreed between co-borrowers. Most couples split in proportion to their respective EMI payments. The proportionate interest and principal amounts are calculated from the loan repayment schedule (amortisation schedule) provided by the bank. Both persons should maintain separate records of their EMI contributions (bank statements showing transfers) for documentation purposes.
Is there any deduction limit for let-out property under joint ownership?
For a let-out (rented) property, there is no Rs 2L cap on interest deduction — unlike self-occupied property. Each co-owner can claim their proportionate share of the full interest paid as a deduction against rental income. If rental income is insufficient to absorb the interest, each person can set off their share of the loss against other income up to Rs 2L per year (under income from house property head), with the balance carrying forward for 8 years.
Can stamp duty be claimed as deduction in a joint purchase?
Yes. Stamp duty and registration charges paid on property purchase are eligible for deduction under Section 123 (80C basket) in the year of purchase. Both co-owners can claim their proportionate share of the total stamp duty and registration charges within their individual Rs 1.5L Section 123 limit. This is a one-time deduction available only in the year of purchase — it cannot be spread over multiple years.
