1> I am planning to take SBI Joint Home Loan and my wife is a co-owner and co-applicant also and she is working. My salary is higher and currently come under 20% tax slab and she comes under 10% tax slab. But the full EMI is planned to be paid by me only. I want to know whether I can claim full tax exemption for Principal paid and interest paid. Can I do the same?
2> If the house is still under construction and would take 3 years to complete then how the Tax benefits work?
3> Tax benefits if the house is Rented out after possession after 3 years?
4> For SBI Home loans is it mandatory to have my wife as First co-applicant, if borrowing under Women scheme (lower interest rate), would this be beneficial ? (Would this have impact on my Question 1 – full tax benefits by me)
It would be really great if you can please write an article on Home loans tax benefits for a layman to understand this so-called complex process.
add123-1) No, you can’t take the full tax benefits of your home loan. It depends on the share of property rights of all co-owner mentioned in the registry papers. If you and your wife co-own the property with each 50% ownership, then both principal and interest must be claimed for tax benefit in that proportion only i.e. 50% of each owner can claim the tax benefits of home loan and interest payment.
If you fall under higher tax slab, then I suggest you to have more rights over property, this can make your claim on tax benefits at higher side. For example, if you claim property rights at 60% then you can claim tax benefit up to 60% of what interest and principal you pay.
2) If house is under construction, then you can’t take the tax benefit on principal (under Sec.80C) and interest (Under Sec.24) during this period. However, the interest paid during under construction period can be claimed in 5 equal installments in five FYs when you take possession of property.
3) If the property is rented out, then the you can claim the entire interest payment for deduction under Sec.24.
4) Form SBI home loan, it is not mandatory. However, they may be asking so as your income may be falling short of loan eligibility. Yes, to certain extent buying in the name of women may be beneficial. However, it may change tax benefit equation.
Sure..I will write a detailed post on this.