real estate developers in pune

Building Future Together

I'm going to use the excuse of Valentine's Day to push the cause of combined finances between husband and wife. When buying a home, couples have the opportunity to save a tremendous amount of money by taking a joint home loan and claiming dual tax benefits. A joint home loan will not only allow you to share the responsibility of the EMI repayments, it will also make you eligible for a higher loan amount because the bank or the lender will consider your combined incomes as a couple and your combined credit score. The thing to also keep in mind is that when you apply for a home loan as co-applicants it is important for both parties to also be joint owners of the home. You cannot have one without the other.

Now, let's take a look at the tax benefits. Co-borrowers enjoy double the tax benefits as individual borrowers. You are allowed to claim tax deductions under Section 24 against interest repaid and under Section 80C against principal repaid. The benefit claimed for each assessment year in proportion to the payment made and the ownership rights of each borrower on the property.

If the property is self-occupied, then an amount up to 200,000 is allowed for deduction of each borrower on account of interest paid under Section 24. Under Section 80C, each borrower can claim deduction up to 1,50,000 on principal paid. Leading to a double benefit as a family.

HERE ARE A FEW THINGS TO KEEP IN MIND

• The property has to be registered in the names of both borrowers and it helps if the share of the rights is mentioned in the registered property ownership papers.

• The credit score of both borrowers is taken into account by the lender, so make sure you have a strong credit track record.

• Be clear about the payment of the EMI. It is the easiest to do it out of a joint bank account that you both deposit money into. Alternatively, the EMI can go out of one account and the other borrower can reimburse the payment.

Buying a home together is a great way to make the most of the advantages that the tax system offers you as a couple. Happy investing!

--The writer is the Editor of Magicbricks NOW and the Editor of Personal Finance and Real estate on ET NOW