EMI and tax benefit in join home loan.

POSTED BY shah shah ON June 4, 2013 1:05 pm COMMENTS (10)

I have brought home loan from bank of Maharashtra.

Declaring 3 owners/applicatants for the same property.
My brother, my mother and myself.
Mother is house wife where as me and  my brother is working in private company.

For now me and my brother paying EMI through cheque from our respective salaried account to BOM join account at end of month.

My question is can i get 50% tax benefit though my ownership to 33.33% in join loan.

I asked to many friends/CA. Few are saying as you are paying 50% EMI, you should get same percentage tax benefit.

Hoping you would definitely solve my query. Let me know if you require more detail on loan structure or other.

Email: shah450@gmail.com

10 replies on this article “EMI and tax benefit in join home loan.”

  1. shah shah says:

    Sorry to start this conversation again. Dear Ashal, can you provide what should be the proper content/written i should mentioned in my share declaration certificate which states that
    – I am paying 50% of EMI
    – My brother paying 50% of EMI
    and My mother paying 0% as she is house wife.

    Can you please provide sample join loan declaration form containing above details?


  2. Dear Ashish, that 100 Rs. Stamp Paper agreement is the most wise thing to do. The initial 20L Rs. DP paid by both of you can decide the ownership %age.



  3. Ashish Garg says:

    Dear Ashal,

    Sorry to jump in as usual, how would one decide on the share / contribution of money in a jointly bought property.

    For example, me and my wife had bought an apartment at lest 60 lakhs and paid the developer Rs.20L from our pocket and taken a loan of Rs.40L from bank. No where it is stated that how much each one has paid to developer or how are we individually going to pay to bank. The developer is getting his money so he is not bothered how are we managing internally and bank is getting their EMI on time from joint account so even they are not bothered about the ration / share.

    For the sake of simplicity, we have done an internal agreement on Rs.100 stamp paper (not even notarised) that we share 50% of the property and are paying 50% part of EMI from our share each.

    Suggest if there is anything wrong in it (leave aside the worst case scenario of fight among spouse on property)


  4. Dear Shah, only option possible, if the name of mother is added just for simplicity of the holding & she did not pitch in any amount. in this case, you & your brother can claim the tax benefit on 50% each.



  5. Dear Shah, you like it or not, but the ownsership ratio ‘ll decide the loan benefit.



  6. shah shah says:

    Hello Ashal, Yes you are right. I forgot to get these detail earlier. By the way is there any legal process which clearly indicate how much percentage i am going to pay and based on that proof i can get tax benefit. Droping my mother name from loan at this time, i dont think its possible.

  7. Dear Shah, please contact your bank to know if you can drop your mother from your loan? I think it’s not possible still give it a try. Actually these things should be discussed before purchasing the property not after that. 🙂



  8. shah shah says:

    Thanks Ashal. Understood your point. Now advice what to do.
    My simple funda is i should get tax benefit on whatever i am paying EMI… Is there any legal process to have claim 50% in the above case? Pls advice.

    Just thinking, can i remove my mother name from co-borrower?

  9. Dear Shah, just to add in my prev. reply, if Mother is co-owner only & no co-borrower, then only you & your brother can claim tax benefit 50% for each.



  10. Dear Shah, as all the co-owners are co-borrowers also, the share in loan is prefixed for each of you. So it’s 33.33% for each of you. No matter your mother being a housewife claims or not, you & your brother can not claim her share.



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