Tax benefits on home loans for Co-owners with Auto-Fill Income Tax Software in Excel for the F.Y.2021-22

  

 Tax benefits on home loans for Co-owners. All joint owners can get tax benefits on a joint home loan if certain conditions are met. Let's take a look.

 

It is pertinent to note that ‘ownership of property is a prerequisite for receiving any tax benefit as opposed to property. You may have taken it jointly, but if you do not own the property - you cannot get tax benefits.

 

There are situations where the property is owned by one parent, and the parent and child together take out a loan that is only repaid by the child. In such cases, the child who is not a co-owner is deprived of the tax benefit on the home loan.

Terms of claiming property tax benefits

You may also, Like- Automated Income Tax Preparation Excel Based Software All in One for the Bihar State Govt Employees for the F.Y.2021-22[This Excel Utility can prepare at a time your Tax Computed Sheet with New and Old Tax Regime U/s 115 BAC + Individual Salary Statures as per the Bihar State Employees Salary Pattern + Automated H.R.A. Exemption Calculator U/s 10)13A) + Automated Income Tax Revised Form 16 Part A&B and Form 16 Part B]

You must be a co-owner of the property to be able to claim tax benefits for a home loan, you must be a property owner. In many cases, the loan is taken jointly, but the borrower does not own the property according to the documents. In such cases, you cannot claim tax benefits.

 

You must be a co-recipient for the loan. In addition to being an owner, you must be an applicant according to the loan documents. Owners who are not borrowers and do not contribute to EMI will be deprived of tax benefits.

 

The construction of the property must be completed - tax benefits on the property of a home can only be claimed, from the financial year that the construction of the property is completed. Tax benefits are not available for a property under construction. However, any costs prior to completion are claimed in five equal instalments from the year the construction is completed.

You may also, Like- Automated Income Tax Preparation Excel Based Software All in One for the Assam State Govt Employees for the F.Y.2021-22[This Excel Utility can prepare at a time your Tax Computed Sheet with New and Old Tax Regime U/s 115 BAC + Individual Salary Statures as per the Assam State Employees Salary Pattern + Automated H.R.A. Exemption Calculator U/s 10)13A) + Automated Income Tax Revised Form 16 Part A&B and Form 16 Part B]

 

What are the tax benefits?

 

Each co-owner, who is a co-applicant for the loan, may claim a tax benefit of Rs 2,00,000 U/s 24 B for home loan interest on their income tax return. The total interest paid on the loan is allocated to the owners in proportion to their ownership. Needless to say, the total interest claimed by the owner / or recipient cannot exceed the total interest paid for the loan.

 

For example, let's say Tatul and his wife bought a home on loan and paid Rs 4,50,000 in interest. They have a 50:50 equal share of the property. Ratul can claim Rs 2,00,000 in his tax return, his wife can also claim Rs 2,00,000.

 

For a rented property - In the budget of the year 201, the interest that can be claimed in the case of rented property is limited to the amount that the loss of property of such house is not more than Rs. 2 lakhs.

You may also, Like- Automated Income Tax Preparation Excel Based Software All in One for the Jharkhand StateGovt Employees for the F.Y.2021-22[This Excel Utility can prepare at a time your Tax Computed Sheet with New and Old Tax Regime U/s 115 BAC + Individual Salary Statures as per the Jharkhand State Employees Salary Pattern + Automated H.R.A. Exemption Calculator U/s 10)13A) + Automated Income Tax Revised Form 16 Part A&B and Form 16 Part B]

 

Each co-owner can claim a maximum rebate of Rs 1,50,000 for capital payment under section 80C. This is within the overall limit of Rs 1,50,000 under Section 80C.

 

Therefore, as a family, you will be able to take a larger tax benefit as opposed to the interest paid on a home loan when the property is jointly owned and your interest is more than Rs 2,00,000 per annum.

 

There may be a situation where you are paying the entire loan instalment and the co-borrower is not paying any money. In this case, you can claim full interest as a deduction on your income tax return.

 

Joint owners can also claim stamp duty and registration charges for a property. We have a detailed guide to help you maximize your tax benefits when you own a home.

You may also, Like- Automated Income Tax Preparation Excel Based Software All in One for the Non-Govt (Private) Employees for the F.Y.2021-22

Main Feature of this Excel Utility-

@ This Excel Utility can prepare at a time your Tax Computed Sheet with New and Old Tax Regime U/s 115 BAC

 

@ Individual Salary Statures as per the Non-Govt (Private) Employees Salary Pattern

 

@ Automated H.R.A. Exemption Calculator U/s 10)13A)

 

@ Automated Income Tax 12 BA

 

@ Automated Income Tax Revised Form 16 Part A&B and Form 16 Part B]

Read More

Taking a home loan can help you save tax| With Automated Income Tax Preparation Excel Based Software All in One for the All Government & Non-Government Employees for F.Y.2021-22

 Taking a home loan can help you save tax| The repayment of a Home Loan comprises 2 components:

1. Repayment of Principal and

2. Repayment of Interest

As the repayment comprises of two different components, the tax benefit on a home loan is governed by different sections of the Income Tax Act. Following are the benefits available on loan taken on House Property which can be claimed as deductions in the Income Tax Return: 

1. Deduction on Principal Repayment (U/s 80C): The amount paid as Repayment of Principal of Home Loan taken by an Individual/HUF is allowed as deduction u/s 80C. The maximum deduction allowed u/s 80C is Rs. 1,50,000. This deduction is available on a payment basis. But to claim this deduction, the house property should not be sold within 5 years of possession. Otherwise, the deduction claimed earlier will be added back to the total income in the year of sale. 

You may also like- Automated Income Tax Preparation Excel Based Software All inOne For the Assam State Employees for the F.Y.2021-22 as per Budget 2021[This Excel Utility can prepare at a time your Income Tax Computed Sheet + Individual Salary Structure as per the Assam State Employees Salary Pattern + Automated Income Tax H.R.A. Exemption Calculation U/s 10(13A) + Automated Income Tax Revised Form 16 Part A&B + Automated Income Tax Form 16 Part B for F.Y.2021-22]

 

2. Deduction for Stamp Duty and Registration Charges (u/s 80C): A deduction for stamp duty and registration charges paid on the purchase of house property can also be claimed u/s 80C but within the overall limit of Rs. 1,50,000. It can be claimed only in the year in which these expenses are incurred.

 

3. Deduction of interest on Home loan. As per Sec 24(B), the maximum deduction for Interest payable on the Loan is Rs. 2,00,000 where the loan has been taken on or after 01-04-1999 for the Purchase or Construction of a self-occupied property and the property has been acquired or constructed within 5 years from the year in which the loan was taken. The maximum tax deduction allowed u/s 24 of interest on the loan on a self-occupied property is Rs. 30,000 where the loan was taken before 01-04-1999 or the loan was taken for repair, renewal or reconstruction. There is no maximum limit in case the house property for which the Home Loan has been taken is not self-occupied and the taxpayer can take a deduction of the whole interest amount.

You may also like- Automated Income Tax Preparation Excel Based Software All inOne For the Bihar State Employees for the F.Y.2021-22 as per Budget 2021[This Excel Utility can prepare at a time your Income Tax Computed Sheet + Individual Salary Structure as per the Bihar State Employees Salary Pattern + Automated Income Tax H.R.A. Exemption Calculation U/s 10(13A) + Automated Income Tax Revised Form 16 Part A&B + Automated Income Tax Form 16 Part B for F.Y.2021-22]

4. Additional deduction of interest u/s 80EEA: Additional deduction of interest on home loans taken from any financial institution is available to individuals up to a maximum limit of Rs. 1,50,000 provided the following conditions are satisfied:

The stamp value of the property does not exceed Rs. 45 lacs.

The loan must have been sanctioned between 1st April 2019 to 31st    March 2021.

On the date of sanction of loan, the individual does not own any other residential house property. 

5. Additional deduction of interest u/s 80EE: 

Things to Remember

Section 80EE came into effect from the financial year 2013-14. It was available for only 2 years, FY 2013-14 and FY 2014-15. The deduction allowed earlier was limited to a maximum of Rs 1 lakh in total and was available for only 2 financial years.

You may also like- Automated Income Tax Preparation Excel Based Software All inOne For the West Bengal State Employees for the F.Y.2021-22 as per Budget 2021[This Excel Utility can prepare at a time your Income Tax Computed Sheet + Individual Salary Structure as per the West Bengal State Employees Salary Pattern + Automated Income Tax H.R.A. Exemption Calculation U/s 10(13A) + Automated Income Tax Revised Form 16 Part A&B + Automated Income Tax Form 16 Part B for F.Y.2021-22]

 

However, this section has been reintroduced, effective F.Y 2016-17 (A.Y 2017-18). Now the deduction is allowed for up to Rs. 50,000 per year until the loan is repaid. Additional deduction of interest on home loans taken from any financial institution is available to individuals up to a maximum limit of Rs. 50,000 provided Additional deduction of interest on home loan taken from any financial institution is available to individuals up to a maximum limit of Rs. 50,000 provided the following conditions are satisfied:

The value of residential house property does not exceed fifty lakh rupees.

The loan must have been sanctioned between 1st April 2016 to 31st March 2017.

The amount of loan sanctioned for acquisition of the residential house property does not exceed thirty-five lakh rupees.

On the date of sanction of loan, the individual does not own any other residential house property.

Summary

Section	Nature	Maximum Deduction	Conditions
24	Interest	Rs. 2,00,000	Construction must be completed within 5 years from the end of FY in which loan was taken.
80C	Principal	Rs. 1,50,000	Property should not be sold within 5 years of possession.
80C	Stamp Duty	Rs. 1,50,000	The claim is allowed in the year of expense incurred.
80EE	Interest	Rs. 50,000	Property Value should not exceed Rs. 50 lakhs and the loan amount should not exceed Rs. 35 lakhs.
80EEA	Interest	Rs. 1,50,000	The stamp value of a property should not exceed Rs. 45 lakhs and deduction u/s 80EE must not be claimed.

Download Automated Income Tax Preparation Excel Based Software All in One for the Government & Non-Government Employees for the F.Y.2021-22 as per Budget 2021 

Feature of this Excel Utility-

# This Excel Utility can prepare your Income Tax Computed Sheet

 

# Individual Salary Structure as per the Andhra Pradesh State Employees Salary Pattern

 

# Automated Income Tax H.R.A. Exemption Calculation U/s 10(13A)

 

 

# Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10 E for the F.Y.2021-22

Read More