Tax Benefits on a Joint Home Loan

On a joint home loan, each co-borrower who is also a co-owner can claim the deductions independently — so the household’s total benefit can be far larger than a single borrower’s. Each person can deduct up to ₹2,00,000 of interest (Section 24(b), self-occupied) and up to ₹1,50,000 of principal (Section 80C) on their share, all under the old regime. These are FY 2025-26 rules and this is general information, not tax advice.

The two conditions

To claim, a person must be both an owner of the property and a borrower on the loan, and must actually contribute to the repayments. A spouse who is only a co-borrower but not a co-owner — or a co-owner who doesn’t repay — generally can’t claim. The deduction is split in the ratio of ownership and repayment, so keep clear records of who pays what.

How the limits double up

The caps are per person, not per loan. So two equal co-owners servicing the same loan can, between them, claim up to ₹4,00,000 of interest and ₹3,00,000 of principal in a year — double what one borrower could.

Worked example. Say a couple takes a loan whose first-year interest is ₹5,00,000 and principal ₹3,00,000, split 50:50. Each claims their half — ₹2,50,000 of interest (capped at ₹2,00,000 each) and ₹1,50,000 of principal (within the ₹1,50,000 80C cap each). For a co-owner earning ₹15,00,000 in the old regime, that share of the loan reduces tax by roughly ₹1,09,200; the second co-owner gets their own, similar benefit. Model your own share in the tax-benefit calculator by setting your ownership percentage.

The catch, again

All of this lives in the old regime. If either of you is better off under the new regime overall — quite possible given its lower rates — the joint-loan deductions don’t apply to that person. Each co-borrower should compare regimes on their own income; see old vs new regime for borrowers. As always, confirm the split and the claims with a chartered accountant.