So let us further understand these benefits in detail.
Tax exemption and rebate
If the property is purchased in the name of wife or mother then there is a huge probability that the home loan is also in her name, especially as many banks clearly stipulate that the loan account is in the name of the owner of the property. In such a case, if the property is self-occupied then the deduction towards interest is limited to RS 1.5 lakh per financial year. If the property is rented out, the entire interest on the home loan can be claimed as the deduction against the net rental value. However, you cannot enjoy any tax rebates if you buy the property in your wife’s name, and if you are the co-applicant of the loan as even co-applicants of home loans are not eligible to receive tax concessions.
If a loan has been availed of to buy the property, you must know that the loan will be always be given to the owner of the house and, being a co-applicant, it does not entitle you to get tax concessions. Also, the wife may not be considered an eligible candidate for a loan by housing finance companies if she does not have an income of her own.
Discount on stamp duty
An essential part of stamp duty is registering a property, a stamp duty is levied on the property and the percentage varies from state to state. Stamp duty is calculated as a percentage of the agreed value of the property or its market value, whichever is greater. Women get a certain amount of discount if the property is brought in their name. The stamp duty levied on women is lower compared to the percentage levied on a man. For example in New Delhi, a woman has to pay 4 percent stamp duty compared with 6 percent for a man and in Several northern region state governments offer partial stamp duty waiver to woman property buyers or to the joint registration, when one of them is a female.
Discount on home loan interest rate
If the property is purchased in the name of women then the rate of interest levied on a home loan is lower. For instance State Bank of India charges a woman with 9.35 percent interest rate instead of 9.40 percent for other customers. The difference in rates does not look huge for sure but they make a huge difference if the loan amount is high. Financial institutions usually offer such differential rates on home loans only when a woman is the sole applicant or is the first co-applicant.
Additional points to remember while buying the property in the name of wife
- Every family has different personal and financial requirement so one must look at all the pros and cons while purchasing the property in your spouse name depending on the needs and situation and then make a decision over it.
- If the property is in name of wife or both husband and wife than at the time of legal dispute both of them will be involved in it so the decision really needs to be made keeping all the possibilities in mind.