A joint home loan can do more than increase loan eligibility. If planned correctly, it can also reduce the family’s tax burden in a legal way. Many husband-wife, father-son, mother-daughter, or sibling borrowers take a joint home loan, but they often make one mistake: they assume that because both names are in the loan, both can automatically claim tax benefits. That is not always true. For Section 24 benefits, the person should normally be a co-owner, co-borrower, and actual contributor to the EMI or interest payment.
Section 24 mainly deals with deductions under the head “Income from House Property.” For home loan borrowers, the most important part is Section 24(b), which allows deduction on the interest paid on borrowed capital for purchase, construction, repair, renovation, or reconstruction of a house property.
What Is Section 24 Benefit on a Home Loan?
Section 24(b) allows deduction on home loan interest. For a self-occupied house property, the deduction can be up to ₹2,00,000 if the loan is taken for purchase or construction and the required conditions are satisfied. If the loan is for repair, renovation, or reconstruction of a self-occupied house, the limit is usually ₹30,000. For a let-out property, the actual interest paid or payable during the year is allowed as deduction, though set-off rules may restrict how much loss can be adjusted against other income. The Income Tax Department also mentions that pre-construction period interest is allowed in 5 equal annual instalments, subject to conditions.
Can Both Joint Borrowers Claim Section 24 Deduction?
Yes, both joint borrowers can claim Section 24 benefit, but only when they satisfy the basic conditions. The Income Tax Department explains that when a property is owned by two or more persons and their shares are definite and ascertainable, each co-owner’s share in income from house property is computed separately. In case of a let-out property, deduction for interest is also apportioned according to each co-owner’s contribution in repayment of interest.
In simple words, if both people are co-owners and co-borrowers, both can claim home loan interest deduction according to their ownership share and actual repayment arrangement.
Main Conditions to Claim Joint Home Loan Tax Benefit
1. Both Should Be Co-Owners of the Property
This is the first and most important condition. If your name is only in the loan agreement but not in the sale deed or property ownership document, claiming Section 24 benefit can become difficult.
For example, if a son is a co-applicant in his father’s home loan only to improve eligibility, but the property is fully in the father’s name, the son may not be able to claim Section 24 deduction.
2. Both Should Be Co-Borrowers in the Home Loan
Being a property owner is not enough. The person should also be part of the home loan. If someone is only a co-owner but not responsible for the loan, the lender’s interest certificate may not support that person’s claim.
3. Both Should Contribute to EMI or Interest Payment
The tax benefit should match the actual financial contribution. If husband and wife both own 50% each and both pay EMI equally, they can claim in 50:50 ratio. If one person pays more, the claim should be supported by a proper internal arrangement and bank payment trail.
4. Construction Should Be Complete
For an under-construction property, regular Section 24 deduction cannot be claimed immediately in the same way as a completed house. The interest paid before completion is treated as pre-construction interest and can be claimed in 5 equal annual instalments starting from the year in which construction is completed or the property is acquired.
How Much Can Each Co-Borrower Claim?
For a self-occupied property, each eligible co-owner can claim up to ₹2 lakh on home loan interest under Section 24(b), depending on their share and actual interest paid.
Example:
- Husband and wife own a house in 50:50 ratio.
- Total interest paid in the year: ₹4,80,000
- Each person’s share: ₹2,40,000
- Maximum deduction allowed to each: ₹2,00,000
So, together they can claim up to ₹4,00,000, if both have taxable income and both meet the conditions.
Now take another example:
- Total interest paid: ₹3,00,000
- Ownership ratio: 50:50
- Each person’s share: ₹1,50,000
In this case, each can claim only ₹1,50,000. They cannot claim ₹2 lakh each because the actual interest share is lower.
What If Ownership Ratio Is Unequal?
If the ownership ratio is 70:30, the interest deduction should normally be claimed in the same proportion.
Example:
- Total interest paid: ₹4,00,000
- Owner A share: 70% = ₹2,80,000
- Owner B share: 30% = ₹1,20,000
For a self-occupied property, Owner A can claim up to ₹2,00,000 because of the cap. Owner B can claim ₹1,20,000.
This is why ownership ratio matters. Do not blindly divide the deduction equally if the property papers show a different share.
What If the Property Is Let Out?
For a let-out property, the actual interest paid during the year can be considered while calculating income from house property. However, if there is a loss from house property, the set-off against other income is restricted as per income tax rules. Under the new tax regime, the Income Tax Department’s AY 2025-26 guidance says interest on let-out property is allowed at actual value without limit, but loss under house property cannot be set off against other heads and cannot be carried forward.
For joint owners, rental income and interest deduction should be divided according to ownership share.
Old Tax Regime vs New Tax Regime
This point is very important. For self-occupied property, Section 24(b) interest deduction is useful mainly under the old tax regime. The Income Tax Department’s salaried individual guidance for AY 2025-26 lists Section 24(b) deduction under the old tax regime for self-occupied property, with a maximum limit of ₹2 lakh for purchase or construction where conditions are satisfied.
If you are under the new tax regime, check carefully before assuming the same benefit. For many salaried taxpayers, the old regime may become better when there is a large home loan interest deduction, 80C investment, insurance premium, school fee, or other deductions.
Documents Required to Claim Section 24 Benefit
Keep these documents ready:
- Home loan interest certificate from the bank
- Home loan repayment statement
- Loan sanction letter
- Sale deed or property ownership document
- Possession letter or completion certificate
- Co-owner declaration showing ownership/repayment ratio
- Bank statement showing EMI payment
- Rent agreement and rent receipts, if property is let out
- Municipal tax receipt, if applicable
From AY 2025-26, the ITR-1 FAQ says the Section 24(b) schedule asks for details such as lender name, loan account number, loan sanction date, total loan amount, outstanding loan at year-end, and interest on borrowed capital.
Step-by-Step Process to Claim Joint Home Loan Tax Benefit
Step 1: Confirm Ownership Share
Check the sale deed. If ownership share is clearly mentioned, follow that ratio. If not mentioned, it is generally better to maintain a written declaration between co-owners.
Step 2: Collect Interest Certificate
Download the annual interest certificate from your bank. It shows how much interest and principal were paid during the financial year.
Step 3: Divide Interest as Per Share
Divide the total interest according to ownership and repayment ratio. Do not claim more than the actual interest paid.
Step 4: Submit Proof to Employer
If you are salaried, submit the interest certificate and property details to your employer for TDS adjustment. If you miss it, you can still claim the deduction while filing ITR.
Step 5: Fill House Property Schedule in ITR
Each co-owner should show their share of house property income and interest deduction in their own ITR. For a let-out property, rental income should also be divided according to ownership share.
Common Mistakes to Avoid
Do not claim deduction only because your name is in the loan. Ownership is important.
Do not let both borrowers claim the full interest amount separately. The total claim by all co-owners cannot exceed the actual interest paid.
Do not claim regular deduction for an under-construction property before completion.
Do not ignore the tax regime. A deduction available in the old regime may not give the same benefit in the new regime.
Do not forget documentation. In case of notice or verification, you should be able to prove ownership, loan liability, and repayment.
FAQs
Q1. Can husband and wife both claim ₹2 lakh each under Section 24?
Yes, if both are co-owners, co-borrowers, and both contribute to the loan repayment. For a self-occupied house, each can claim up to ₹2 lakh, but only according to their share of actual interest paid.
Q2. Can I claim Section 24 benefit if I am only a co-applicant but not a co-owner?
Usually, no. A co-applicant without ownership rights may not be eligible to claim home loan tax benefit because the deduction is linked to income from house property and ownership.
Q3. Can one borrower claim the full interest if the other co-owner has no income?
It depends on ownership and repayment facts. If the property is jointly owned in 50:50 ratio, one person should not blindly claim 100% deduction unless the ownership, payment contribution, and tax position properly support it. It is safer to follow documented ownership and repayment ratio.
Q4. Can Section 24 benefit be claimed before possession?
Regular deduction starts after completion or acquisition of the property. Interest paid before completion is treated as pre-construction interest and can be claimed in 5 equal instalments from the year of completion.
Q5. Is Section 24 deduction available for home renovation loan?
Yes, interest on loan taken for repair, renewal, or reconstruction can be claimed, but for a self-occupied property the limit is generally ₹30,000, not ₹2 lakh.
