Why is Couples Joint Property Ownership a Good Option?

Written by Jayant Upadhyay

In addition to researching on the property deals and making an informed decision regarding the final property purchase, home buyers are fast grasping the benefits of acquiring their immovable assets through best modes. Buying a home now involves choosing the best financial arrangements and methods for availing tax benefits. Register a property jointly with the spouse is an example of one such smart way. Let’s underline a few essential advantages to owning a joint property:

Higher Loan Eligibility:

Home loan eligibility and amount sanctioned bears a direct relation to one’s income levels. Many individuals might not be able to realize the dream of owning their own house is not getting fulfilled just because of low CIBIL scores. Jointly couples have access to a higher sanctioned loan amount as well as increased eligibility. Since two earning individuals have a higher combined income level, banks can offer them higher loan amounts, and their combined CIBIL scores are taken into the assessment (subject to the term the spouse is working). Moreover, the financial responsibility of a joint home loan can be shared among the two individuals.

Less Stamp Duty:

Many states in India offer stamp duties lowered by 1 to 2% to women buyers in order to encourage them to own property individually or through joint ownership. Since stamp duty is calculated on the value of the property, a reduced rate of 1-2% results in significant amount of savings.

Tax Savings

  • Under Section 80C of the Income Tax Act, each of the joint home loan borrowers can get a tax deduction of up to Rs. 1.5 lacs annually on the principal component.

Under Section 24 (b) of the Income Tax Act, one can claim a deduction on the interest amount up to Rs. 2 lacs annually. Thus a joint home loan helps in claiming tax benefits for both the owners. ( Source: Housing.com)

Section 24 (B)

  1. If money is obtained for construction, purchase, renewal, repair or reconstruction of the house property. A deduction can be claimed.
  2. Interest includes brokerage, commission, service fees, prepayment charges etc.
  3. If an individual rather than raising a loan from a third party pays sale price to the seller instalments along with interest than such interest is also allowable.
  4. Interest on borrowed money which is payable outside India shall not be allowed as deduction under section 24 (b)
  5. Assesse necessarily be the owner or deemed owner of the house property for getting deduction under section 24 (b) Source: Taxadda

Succession:

Under single ownership, the property transfer process can be quite lengthy and time-consuming and may involve undue conformation to rules and regulations. However, under joint ownership, in case of demise of a joint owner, the living spouse is the successor, and procedural hassles can be avoided.

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