Tax Saving Tips: Save More Tax By Taking a Joint Home Loan With Your Wife – Know the Benefits
✅ Joint Home Loan Benefits: How Taking a Loan With Your Spouse Can Save More Tax
Are you planning to take a home loan to buy your dream house? If yes, then here’s a smart tip that can help you save a significant amount of tax. By opting for a joint home loan with your spouse, you not only increase your loan eligibility but can also enjoy double tax benefits. Additionally, some financial institutions also offer discounts on interest rates for women borrowers, making the loan more affordable.
If you are planning to take a home loan, it is worth considering taking the loan jointly with your wife. This decision can offer you tax benefits under Section 80C and Section 24B of the Income Tax Act, which can collectively help you save up to ₹7 lakh in a financial year.
In this article, we will tell you the top benefits of taking a joint home loan and how it can significantly reduce your tax liability.
✅ What Is a Joint Home Loan?
A joint home loan is a type of home loan taken by two or more people, usually husband and wife. Both individuals become co-borrowers and share the loan repayment responsibility. In return, both can separately claim tax benefits on principal and interest payments, resulting in double tax savings.
Apart from tax benefits, a joint home loan also increases your loan eligibility, allowing you to buy a bigger house with a higher loan amount. Let’s explore its major advantages in detail.
✅ Major Benefits of Taking a Joint Home Loan With Your Wife
📈 1. Higher Loan Eligibility
When you apply for a joint home loan with your wife, the bank considers the income of both individuals to decide the maximum loan amount. This increases your eligibility and allows you to take a bigger loan. As a result, you can buy a bigger and better house than what you could afford with a single income.
Example:
- If you alone apply for a loan and your income is ₹60,000 per month, the bank may approve a loan of up to ₹40 lakh.
- But if you apply jointly with your wife (whose income is ₹40,000 per month), your combined income will be ₹1 lakh. This will increase your loan eligibility up to ₹70-80 lakh, allowing you to buy a more luxurious property.
💰 2. Double Tax Benefit Under Section 80C and 24B
The biggest advantage of taking a joint home loan is the double tax deduction under the Income Tax Act. Both husband and wife can individually claim tax deductions, leading to huge tax savings.
Here’s how you can save tax:
| Tax Deduction Type | Maximum Deduction for Each Person | Total Deduction for Both | Section under Income Tax Act |
|---|---|---|---|
| Principal Amount Deduction | ₹1.5 lakh per year | ₹3 lakh per year | Section 80C |
| Interest Payment Deduction | ₹2 lakh per year | ₹4 lakh per year | Section 24B |
| Total Tax Savings | ₹3.5 lakh per year | ₹7 lakh per year | Combined Tax Benefit |
👉 This means you can save up to ₹7 lakh in a financial year just by taking a joint home loan with your spouse.
💸 3. Lower Interest Rate for Women Borrowers
Many banks and non-banking financial institutions (NBFCs) offer concessional home loan interest rates if the primary applicant is a woman. The interest rate discount usually ranges between 0.05% to 0.10%, which can significantly reduce the EMI burden over the loan tenure.
✅ Example:
- If the regular interest rate is 9%, then women borrowers may get a 0.10% discount and will pay only 8.9%.
- Over a 20-year loan tenure, this small discount can result in savings of lakhs of rupees.
🏠 4. Stamp Duty Discount for Women
In some states like Delhi, Rajasthan, Haryana, and UP, stamp duty on property registration is lower if the property is registered in the name of a woman. This further reduces the total cost of the property.
✅ Example:
- In Delhi, if the property is registered in the name of a woman, the stamp duty is only 4%, while it is 6% for men.
- On a property worth ₹50 lakh, you can save ₹1 lakh just in stamp duty.
💎 5. Shared Loan Repayment Responsibility
Since both husband and wife are co-borrowers, the loan repayment burden gets divided equally. This creates a better financial discipline and ensures that the EMI burden is not too heavy on one person.
Additionally, in case of any financial crisis, the income of one person can ensure that the EMI is paid without defaulting.
✅ How Much Tax Can You Save With a Joint Home Loan?
Let’s assume you and your wife have taken a home loan of ₹50 lakh at an interest rate of 9% for a 20-year tenure.
Here’s how much tax deduction you can claim annually:
| Deduction Type | Husband Claim (₹) | Wife Claim (₹) | Total Deduction (₹) |
|---|---|---|---|
| Principal (Section 80C) | ₹1.5 lakh | ₹1.5 lakh | ₹3 lakh |
| Interest (Section 24B) | ₹2 lakh | ₹2 lakh | ₹4 lakh |
| Total Tax Saving | ₹3.5 lakh | ₹3.5 lakh | ₹7 lakh |
👉 This way, you can save ₹7 lakh annually just by taking a joint home loan with your wife.
✅ Things to Remember Before Taking a Joint Home Loan
Before you decide to take a joint home loan, keep these important points in mind:
- Co-Ownership of Property: Ensure that both husband and wife are co-owners of the property to claim double tax benefits.
- Co-Borrower Role: Both applicants should be co-borrowers of the home loan.
- Legal Documentation: Get a registered sale deed clearly mentioning both names.
- Equal EMI Contribution: If possible, ensure that both partners contribute equally to loan EMIs to avoid future complications.
- Credit Score Impact: Any loan default by either partner will affect the credit score of both individuals.
✅ Final Thoughts: Why Should You Take a Joint Home Loan?
A joint home loan with your wife not only increases your loan eligibility but also helps you enjoy maximum tax benefits under Section 80C and Section 24B. Additionally, if the property is registered in the name of your wife, you can also get concessions on interest rates and stamp duty, resulting in significant cost savings.
So, if you are planning to buy your dream house, it’s highly recommended to take a joint home loan and save up to ₹7 lakh annually on your taxes.