Tax Benefits of Buying a House Jointly
Mar 28, 2019 Real Estate News
Buying a house is the most significant investment for most of us. And to give the same a little more push, the government provides various benefits under ‘housing for all’ scheme. But the benefits and perks increase when you are buying the house jointly with your spouse. Apart from the stamp duty charges and an extension for the limit for the home loan, there are some tax benefits that not everyone is aware of.
We discuss them below:
If the property is owned jointly, then both the owners can claim a deduction of tax of Rs 2 lacs individually.
If you are the sole owner and you are paying more home loan that getting the rental income, then you can claim the tax benefit for the loss you are incurring, and if the loss is more than Rs 2 lacs, then the remaining amount can be adjusted in the next eight financial years.
We discuss them below:
Self-occupied property tax benefit
According to the Income Tax Act, 1962, the home owners are eligible to claim the tax benefit for the self-occupied property. The home owner can claim up to Rs 2 lacs for the deduction of interest paid on the home loan. That is, if you have paid Rs 5 lacs, as the interest on the home loan paid in a financial year, then you are eligible to claim the deduction of Rs 2 Lacs.If the property is owned jointly, then both the owners can claim a deduction of tax of Rs 2 lacs individually.
Property that is rented
Owning the property jointly ahs benefits when you are renting it out as well. When you claim for a tax benefit from the rental income, the income is divided among the owners. If you are paying more home loan for the property than the rental income, that means you are incurring a loss for the same. The owners can apply for the tax benefit of up to Rs 2 lacs for the rental income. The owners can individually apply for the tax exemption for the same.If you are the sole owner and you are paying more home loan that getting the rental income, then you can claim the tax benefit for the loss you are incurring, and if the loss is more than Rs 2 lacs, then the remaining amount can be adjusted in the next eight financial years.
The benefit of tax exemption under Section 54
Capital gains from the selling of property are taxable under Section 54. But if they invest the capital gains in another property within the given time frame, then they can reduce the taxable capital gains. It applies to both individual and jointly owned properties.The exemption under Section 54EC
One can claim for the tax exemption of Rs 50 lacs under the Section 54EC if they invest the capital gains on the specified bonds within the given time frame. If the property is jointly owned, then they are individually claiming for tax exemption of Rs 50 Lacs.Looking for property portal?
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