In my previous blog I have written about the Home Loans and Tax Benefits. It covers most of the part in utilizing the Tax Benefits, If you are applied for the Home Loans. But, the mentioned blog overs only about the individual Home Loans and not explaining anything about the Joint Home Loans. By applying the Joint Home Loans, you will get the maximum benefit on the Tax Saving. This blog will writes about the Joint Home Loans and rules applicable for applying the Joint Home Loans.
Basic Rules on Joint Home Loans
- Minimum of 2 and Maximum of 6 applicants can take a loan. Home Loans cannot be applied by more than 6 persons jointly.
- The rules says any six persons can join and take a loan, but the banks and institutions insist more restrictions co-applicants. The restrictions are as follows:
- A Joint Home Loan can be taken by Husband and Wife or Parent and Child.
- Friends cannot take Joint Home Loans.
- In some case brothers are allowed to take the Joint Home Loans.
- Banks insist that, co-owners must be co-borrowers for the Home Loans. It is not necessary that all the co-borrowers must be the co-owners of the house.
Advantage on Tax Savings
- It is more advantage when you are taking the Home Loans jointly. It provides maximum benefits on Tax Savings. It is advised to take Joint Home Loans if you are a married couple and both of you are working in a company. This will maximize the Home Loans eligibility and increase the Tax Savings.
- Take an example, Santosh is working in a MNC and his gross earnings is Rs.600000 per annum and his wife also working in a MNC and her earnings is Rs. 400000 per annum. Here both of them falling into the category on tax payment. Now, they are looking into the better plan for Tax Savings. If they are planning to apply for a Joint Home Loans of Rs. 20 lakhs, I would say they are on the right track. Because of the following reasons:
- Investing on property is always worth and future value will be increased.
- Since they are applying for the Joint Home Loan, the maximum loan amount will be higher.
- For the loan amount of Rs.20 lakhs, for example the principal is Rs.150000 and Interest Payable is Rs.250000. They are eligible for the total amount Rs.500000 under the section 80c and 24b. Principal Payment for both of them is (1lakh x 2) and Interest Payment for both of them is (1.5 lakh x 2). In this case the total amount of Rs.400000 will be deducted in the tax. The above example is not calculated based on the Interest Rates and it is just an example to explain you the process. I think now you will better understand the importance of the Joint Home Loans.
- The above assumes that both are equally repaying the loan amount. In another scenario, they are taking the Home Loans in the proportion of 60:40, then the Tax Savings on the repayment also will be in the same proportionate.
I think I have covered most of the facts about Home Loans and Tax Benefits on my Previous Article and this article. I have heard there is Home Loan Rate Cuts from the ICICI Bank. I am collecting fact on the news and will be ready for the next article soon. Till the time read this article and will meet you on my next article. happy reading!!!