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Property EMI Tax Benefits

Every joint owner of a property can avail tax benefits on the EMI being paid…

I bought an apartment in 2007, which is owned jointly with my wife. The home loan too has been taken by both of us, but the account from which the EMI is deducted is not held jointly. The interest component of the loan is more than Rs3 lakh a year. Can both, my wife and I, claim tax benefit?
- Rajesh Jain

Even if you are paying the full EMI from your income and your wife is not contributing towards this, she will be eligible for deduction of interest under Section 24 as she is a joint owner of the property and also a joint applicant for the loan. This is because the deduction on interest is on ‘due basis’, not on the basis of payment.

You have not mentioned whether your wife is transferring any amount to the account from which the home loan EMIs are being deducted. Because, deduction on principal under Section 80C will not be allowed as it is on payment basis if she is not contributing to the account from which the EMI is being paid. If the house is rented out, joint owners can claim the entire amount paid as interest on the loan for deduction. For self-occupied property, the maximum amount every co-owner can claim is Rs1.5 lakh.

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