In case husband and wife have separate source of income, they can apply for home loan together. Tax benefit is available for both and applying home loan jointly enables you to get maximum amount. Under Income Tax Act, tax benefits are available on home loan principal amount and interest paid. If there are two or more co-borrowers, all co-borrowers can enjoy the tax benefit.
To get tax benefit you need to be co-owner and co-borrower. You cannot get tax benefit if you are only co-borrower and not co-owner of the property. The maximum deduction for an individual is up to Rs 1.5 lakhs. While arriving at the share of the loan, repayment of each co-borrower or spouse will be taken into account.
In case of one co-borrower does not have any income can enter in an agreement with spouse. The agreement should state that entire repayment is met from one owner or borrower’s income. This would ensure that the main applicant will have 100% beneficial home ownership and avail all tax benefit applicable to single owner or borrower.
Repayment can be done from a joint bank account or husband and wife can share EMI. Both have to issue specified number of cheques towards the loan repayment. Copy of borrowers’ certificate is needed for each borrower to claim their respective tax relief. A co-borrower should enter into a simple agreement with the spouse on stamp paper of Rs 100. The agreement must contain share of the ownership along with home loan availed by the couple. Each borrower must have a copy of principal amount paid and interest paid certificate issued from bank to claim tax benefit.