Joint Ownership

Joint Ownership

House Purchased Jointly (Me & My Wife)

You recently bought the property in joint name, signed property agreement jointly and also signed loan agreement and now thinking how to claim deductions for Return Filing as its co-ownership

Co-ownership of house property is allowed as per the income tax act and the income accruing from property should be taxed in the hands of the co-owners according to their income they are able to generate from it.

Tax deductions can be availed by husband and wife individually on both Principal payment (under section 80C) and Interest payment (under section 24) as per the following terms:

a. Co-owners who have taken joint loan can claim tax deductions in the ratio of ownership in the property.

b. Principal Repayment

  • Maximum tax deduction allowed is Rs. 1,50,000 (Rs. 2,00,000 for senior citizens) under section 80C of IT Act, subject to maximum limit of Rs. 1,50,000 across all investments under section 80C.
  • Tax benefit for principal repayment is allowed only in case of a self-occupied house.
  • Each co-owner can claim deduction of Rs. 1,50,000 individually on principal repayment.


c. Interest Repayment

  • Interest repayment of home loan can be claimed under section 24 of IT Act under the head “Income from house property”.
  • In case of self-occupied property, maximum deduction allowed towards interest repayment is Rs. 2 lakhs or actual interest paid in the year, whichever is lower.
  • Each co-owner can claim deduction of upto Rs.2 lakhs individually toward interest repayment.
  • In case, you have rented out your house, you can claim deduction on entire interest amount without any limit. However, you have to add rent income in your total income, in the proportion of your ownership.

 Example for Co Ownership

Let’s say Mr & Mrs Anil Kumar Sharma have recently purchased a Commercial complex in Hitech City, Hyderabad. Both the Wife & Husband hold 35 % & 65% of the property respectively as per the property.  They have rented it out to State bank of India for long term lease for 10 years with an rental value of Rs 50,000 per month.

At the time of return filing, the income of Rs 50,000 should be split jointly by both the wife & Husband according to their purchase agreement. So Mr Anil Sharma taxable income would be 65% * (50,000*12) i.e. Rs 3,90,000 and Mrs Anil Kumar Sharma share would be 35% * (50,000*12) i.e. Rs 2,10,000

As discussed earlier, both the joint owners would be allowed to claim deductions under section 24 

Tax saving for Freelancers, Professionals, Trader and Web based agencies

10 mins of consultation. Place a request.

Some of the featured articles from our knowledge center

Business2 13a51fd54d37dfeead10bd04c34a46671e69097acf6d8002d2665eb06b5cf58f
What is the income tax payable on partnership firm

As per section 4 of partnership act 1932, partnership means the relationship between the person who are agreed to share the profits of business car...

Business3 1835184f1312bba0b871fddd223a24dd62299180ed03a78d9e4098813c851963
What is business income on presumptive basis under section 44ad and 44ada

As per section 44AA income Tax act 1962, every person who is carrying on business or profession is required to maintain books of accounts. However,...

Business1 8b8cee9b60a38e9df92fb5b897e7c09195532b3d70b7ec28803a600cf2ce60cd
What is GST and different types of GST forms

The Prime Minister approved “The constitution amendment bill for Goods and Service Tax”(GST) in the Parliament Session (Rajya Sabha on 3 August 201...