Can I claim tax benefits?

Updated on: Tuesday, January 12, 2010

My wife and I want to opt for a joint loan with her being a co-borrower. If I pay 100 percent EMI, can she claim the tax benefit as co-borrower? If I take the home loan, can I add my would-be wife later as a co-borrower in the loan so that even she can pay a part of the EMI?
Amit Ranjan

To be able to claim tax deduction benefits, you both have to be co-borrowers to the said loan and co-owners to the said property. Merely being a loan co-borrower does not make you or your spouse eligible for tax deduction benefits if both of you are not co-owners of the property. Tax benefits are available to both on the basis of your individual share in the loan.

I want to purchase land worth Rs 15 lakhs and build a house immediately. The construction amount will come to about 10 lakhs. Can I get a loan for both the plot and construction? Can I get tax exemption?
Ashok Sethi

You can get a loan for the self construction of a home and a plot loan based on your income and the title of the property. You will need to provide an architect’s estimate of the construction and have all the local approvals. You will need to bring in your entire margin money (around 20-25 per cent of the total cost) upfront. Loans will be disbursed based on the progress in construction. You can claim tax deduction benefits on home loans for under-construction property only from the financial year in which the construction is completed.

The author is CEO of apnaloan.com which is a complete guide to home loans in India. He can be reached at [email protected]

Can I claim tax benefits?

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