People belonging service class are always worried about Income tax and any way by which they can save some money is more than they would want. For a moment crossing over to home loans, home loans are hefty; it implies that the borrower has to pay a huge sum of money out of his monthly earning as installments if he has borrowed a loan. It adds on the pressure on the borrower but people must know that they can earn income tax benefits ion home loans.
A borrower can enjoy tax benefits on the interest component as well as on the principal component but the benefit could be maximum on joint home loan, where more than two people have borrowed the loan are responsible for repaying the loan.
Each of the borrowers can claim a tax rebate of up to 1 lakh for principal repayment and 1.5 lakh for interest payment and more importantly the tax benefits will be dived amongst the co-borrowers in the same proportion as they own the property.
The most essential thing here is that co-owners have jointly borrowed the loan and they need to repay the loan amount in the same proportion in which they own the property. Also it is necessary that the repayment of the loan is made through a joint account owned by the co-borrowers and if it is not possible then it needs to be ensured that the others are also contributing their share.
So, in order to avail maximum tax benefits joint home loan must be preferred.
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