Maximise Your Home Loan Tax Benefits: A Guide for Joint Borrowers
2 November 2026
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Why Joint Borrowers Can Unlock Bigger Tax Savings
When you and a partner (spouse, parent or sibling) take a home loan together, you don’t just share the EMI – you also share the tax deductions. This can significantly boost the amount you can claim under Section 80C, Section 24(b) and Section 80EEA. In this article we’ll walk you through how joint home loans work, who can claim which benefit, and the steps to ensure you get the maximum relief at the end of the financial year.
Key Tax Deductions on Home Loans
| Provision | What It Covers | Maximum Deduction (per borrower) |
|---|---|---|
| Section 80C | Principal repayment + stamp duty & registration fees (within the overall ₹1.5 Lakh limit) | ₹1.5 Lakh (combined with other 80C investments) |
| Section 24(b) | Interest on home loan for a self‑occupied property | ₹2 Lakh per year |
| Section 80EEA | Additional interest relief for first‑time home buyers (property value ≤ ₹50 Lakh) | ₹1.5 Lakh per year |
Note: The limits above are per individual taxpayer. When a loan is taken jointly, each co‑borrower can claim their own share, effectively doubling the deduction if both meet the eligibility criteria.
How Joint Ownership Affects Each Deduction
1. Principal Repayment – Section 80C
- Eligibility: Both co‑borrowers can claim the principal portion of the EMI under Section 80C, provided they are the legal owners of the property.
- Sharing the Benefit: If you each pay ₹30,000 towards principal in a year, you can each claim ₹30,000 under 80C, up to the ₹1.5 Lakh cap. This works well when the total principal repayment exceeds the individual cap – the excess can be split and claimed by the other borrower.
- Documentation: Keep the home loan statement showing the principal component, and the sale deed that lists both names as owners.
2. Interest on Home Loan – Section 24(b)
- Self‑Occupied Property: Each co‑borrower can claim up to ₹2 Lakh of interest paid, provided the property is self‑occupied and the loan is taken for purchase, construction or renovation.
- Let‑Out Property: There is no upper limit on interest for a let‑out property, but the amount must be shown as Income from House Property and is deductible from rental income.
- Joint Claim: If the total interest paid in a year is ₹3 Lakh, you can split it as ₹1.5 Lakh each and claim the full ₹2 Lakh limit for both (subject to the actual interest paid by each).
3. Additional First‑Time Buyer Relief – Section 80EEA
- Who Qualifies: First‑time home buyers (no prior residential property) whose loan amount does not exceed ₹35 Lakh and the property value is ≤ ₹50 Lakh.
- Joint Borrowers: Both borrowers can claim the extra ₹1.5 Lakh interest relief if each meets the first‑time buyer criteria. This effectively adds another ₹3 Lakh of deduction for the couple.
- Important: The loan must be sanctioned between 1 April 2019 and 31 March 2025 to be eligible for 80EEA.
Practical Steps to Claim the Benefits
- Verify Ownership: Ensure both names appear on the sale deed and the loan agreement.
- Maintain Separate Records: Keep individual copies of the loan statement showing the principal and interest split.
- File Form 16 Correctly: Your employer’s Form 16 should reflect the interest paid under the “Other Deductions” section if they are deducting TDS on your salary.
- Submit Proof to the Assessing Officer: When filing ITR, attach the home loan sanction letter, statement of interest paid, and sale deed as supporting documents.
- Use MyLoanWala’s EMI Calculator: To see how much principal and interest you’ll pay each year, plug your loan details into our calculator – it helps you plan your tax savings.
Common Mistakes to Avoid
- Assuming a Single Deduction Limit: Remember, the ₹2 Lakh interest cap under Section 24(b) is per borrower, not per loan.
- Ignoring Stamp Duty & Registration Fees: These can be claimed under 80C in the year of purchase; many borrowers forget to include them.
- Over‑Claiming for Let‑Out Property: Interest on a let‑out property is unlimited, but it must be set off against rental income, not claimed as a separate deduction.
- Missing the 80EEA Window: The additional interest relief is only available for loans sanctioned within the specified period.
FAQ
Q1. Can a salaried and a self‑employed person claim deductions together? Yes. As long as both are co‑owners and co‑borrowers, each can claim their share of principal and interest under the respective sections.
Q2. What if one borrower does not have taxable income? The deduction can only be utilised against taxable income. If one partner has zero taxable income, the unused portion cannot be transferred to the other.
Q3. Do I need to file separate ITRs for each co‑borrower? Yes. Each individual files their own ITR and claims their respective deductions.
Q4. How does a home loan balance transfer affect tax benefits? A balance transfer does not affect the eligibility of deductions. The new lender will provide a fresh statement showing principal and interest, which you can continue to claim.
Q5. Can I claim both Section 80C and Section 80EEA for the same principal repayment? Yes. Principal repayment qualifies under 80C, while the interest component may qualify for the extra 80EEA relief if you meet the first‑time buyer criteria.
Ready to see how much you can save? Compare home loan offers on MyLoanWala and use our EMI calculator to plan your tax‑saving strategy today.
