Joint Home Loan Doubling

What is This Hack?

Co-borrowers each claim ₹1.5 lakh principal (80C) + ₹2 lakh interest (24b) separately if co-owners in same proportion, doubling total family benefit

How It Works

Taking a joint home loan with spouse/family member as co-borrower can DOUBLE your total tax benefits - but only if done correctly. Here's the key: Both co-borrowers can claim deductions separately under Section 80C (principal repayment up to ₹1.5L each) and Section 24(b) (interest up to ₹2L each for self-occupied property). CRITICAL condition: Both must be co-owners of the property in the same proportion as loan sharing. For example, if you and spouse take 50-50 joint loan, property ownership must also be 50-50. If ownership proportion differs from loan proportion, IT department will allow deduction only in ownership proportion. Total family benefit: ₹3 lakh principal + ₹4 lakh interest deductions combined = potential ₹2.1-2.8 lakh tax saving annually depending on tax brackets. This is especially powerful in old tax regime where 80C and 24(b) are allowed.

Real Example: Couple Taking Joint Home Loan in Mumbai

Situation

Rohan and Priya buy a ₹80 lakh flat in Mumbai. Home loan: ₹60 lakh at 8.5% for 20 years. Annual EMI: ₹6.2 lakh (₹2.4L principal + ₹3.8L interest approx). They take joint loan 50-50 and register property in joint names 50-50. Both in 30% tax bracket, using old tax regime.

Without This Hack

Only Rohan in loan (single borrower): Rohan claims: ₹1.5L under 80C (max limit) + ₹2L under 24(b) (max limit) = ₹3.5L total deduction. Tax saved: ₹3.5L × 30% = ₹1.05 lakh. Priya: No benefit.

With This Hack

Joint loan 50-50 as co-borrowers + co-owners 50-50: Rohan claims his 50% share: ₹1.2L principal (under 80C) + ₹1.9L interest (under 24b) = ₹3.1L deduction. Tax saved: ₹93K. Priya claims her 50% share: ₹1.2L principal (under 80C) + ₹1.9L interest (under 24b) = ₹3.1L deduction. Tax saved: ₹93K. Total family tax saving: ₹1.86 lakh vs ₹1.05 lakh = ₹81,000 EXTRA saving annually!

💰 ₹81,000 extra annual tax saving + builds joint asset ownership

Common Pitfalls to Avoid

Co-borrower and co-owner proportions MUST match - mismatch leads to deduction denial
Co-guarantor is NOT same as co-borrower - guarantor gets NO tax benefit
Property must be self-occupied to claim ₹2L interest cap per person (let-out has no cap but different taxation)
In new tax regime, 80C and 24(b) benefits are NOT available - works only in old regime
If property is under construction, interest deduction starts only after possession
Banks sometimes issue single certificate - request separate certificates explicitly
If one person has no taxable income, their share of deduction is wasted (can't transfer to other)

Prerequisites & Requirements

Both must be co-borrowers in home loan agreement (not just co-guarantor)
Both must be co-owners of property in same proportion as loan
Property ownership documents must clearly show percentage ownership
Both must have taxable income to utilize deductions
Both must opt for old tax regime (benefit not available in new regime)
Property should be self-occupied for ₹2L interest cap per person
Separate loan interest certificates from lender for both co-borrowers

Key Benefits

Potential savings: ₹2.2 lakhs family savings
Implementation time: 1 day
Legal status: fully legal
Risk level: low

Related Hacks

Two Properties Self-Occupied

No notional rent on second property from AY 2026-27

Section 54 Two Properties

Buy two residential properties for LTCG exemption

₹12 Lakh Tax-Free Target

Zero tax on ₹12 lakh income from FY 2025-26

Step-by-Step Guide

Ensure Both are Co-Borrowers

At loan application stage, ensure both names appear as co-borrowers in the loan agreement. Bank/lender must document both as equal borrowers, not just one as primary and other as guarantor. Co-guarantor does NOT get tax benefit.

Make Both Co-Owners in Same Proportion

Property ownership must match loan sharing proportion. If loan is 50-50, ownership should be 50-50. Check sale deed - both names should appear with ownership percentage clearly mentioned (e.g., "equal share" or "50% each"). Get this documented correctly during property registration.

Obtain Separate Loan Certificates

After each financial year, request separate home loan interest certificates from your lender for BOTH co-borrowers. Each certificate should show individual's share of principal and interest paid. Most banks provide this automatically if joint loan is setup correctly.

Verify Ownership Documents

Keep ready: Sale deed with both names and ownership %, Registration documents, Society share certificate (if applicable), Bank loan agreement showing both as co-borrowers. IT department may ask for these during assessment.

Both File ITR Separately

Each co-borrower files individual ITR claiming their share of deductions: Under Section 80C - your share of principal repayment (max ₹1.5L), Under Section 24(b) - your share of interest (max ₹2L for self-occupied). Attach separate loan certificates to ITR.

Monitor EMI Sharing

Ideally, each co-borrower should pay EMI from own bank account in agreed proportion. If one person pays entire EMI, maintain documentation showing fund transfer/reimbursement between co-borrowers. IT department prefers clean documentation.