Are you two going to buy an apartment together? Here's how a shared house loan can help married couples save twice as much on taxes

By Bricksnwall | 2025-12-14

Are you thinking about getting a house loan? If both spouses own and borrow money together, they can each claim up to ₹2 lakh in interest, which is the most tax benefits overall.

Based in Ahmedabad Arjun Saxena and Kavya Saxena bought a flat with a house loan that costs ₹3 lakh a year. If Arjun had accepted the loan by himself, he could only get ₹2 lakh back under Section 24B. He would lose the tax benefit on the other ₹1 lakh. Instead, they decided to share ownership and pay the same amount each month.

The ₹3 lakh interest is split into two ₹1.5 lakh payments, which is less than the ₹2 lakh ceiling, so both can claim their entire portion. They were able to save ₹90,000 in taxes by claiming ₹3 lakh together instead of ₹60,000 if only one person had claimed it. By sharing the loan, the couple saved more on taxes and paid less in interest on the loan.

Higher interest relief is available to co-borrowers.

Section 24(b) says that a person can deduct up to ₹2 lakh for home loan interest on a house they live in. Abhishek Soni, CEO and co-founder of Tax2win, a tax filing website, says, "If there is only one owner, the deduction is limited to ₹2 lakh, even if the interest paid is higher."

But you can only get this deduction if you are still on the old tax system. When you claim the house loan interest deduction, the old tax system is mostly good for your finances.

"However, if a home is rented out and was bought or built with borrowed money, the whole interest amount would be deductible from the rental revenue. Anil Harish, a partner at the law firm D.M. Harish & Co, says, "In this case, there is no limit on interest of ₹2 lakh."

If two people buy a property together and both are paying the EMI, and they live in it, then each person can have their own limit of ₹2 lakh. They can each get up to ₹4 lakh.

A single owner reaches the deduction limit under Section 24 B when the annual interest on their home loan goes over ₹2 lakh. This means that you can only claim ₹2 lakh, even if the real interest paid is more. Because of this, the rest of the interest does not lower taxes, which makes borrowing more expensive overall.

But since there are two co-owners who are also co-borrowers, each person has their own limit of ₹2 lakh. Both owners can get the most out of the deduction by sharing the loan interest. This directly lowers the effective cost of the loan and boosts tax savings, especially if both are in higher tax brackets.

If the total annual interest is ₹4 lakh and both owners are in the 30% tax rate, one owner can only claim ₹2 lakh, which saves them ₹1,20,000 in taxes. The rest of the ₹2 lakh is paid for out of pocket, which means the post-tax interest cost is ₹3.4 lakh. If the loan is shared equally, on the other hand, each owner can deduct ₹2 lakh, which lowers the total tax bill by ₹1.2 lakh and the interest cost after taxes to ₹2.8 lakh.

Joint ownership effectively doubles the deductible interest from ₹2 lakh to ₹4 lakh, increases tax savings by ₹60,000, and decreases the loan's effective yearly cost by the same amount. For families with a lot of money, this structure can make home loans much more affordable.

How EMI shares change deductions

"The deduction for home loan interest is split in the same way as the EMI contribution, not the ownership." Soni said, "Each co-borrower can only claim their share, up to the ₹2 lakh limit."

The interest distribution fluctuates based on how the EMI payment is distributed between the two co-borrowers. Person A, who pays 60% of the EMI, has an interest share of ₹2.4 lakh.

But, according to Section 24 (B), the most a person can deduct is ₹2 lakh, hence person A can only claim ₹2 lakh. Person B, who pays 40% of the EMI, has an interest portion of ₹1.6 lakh, which they can fully claim. In this case, the total deduction is ₹3.6 lakh.

If the EMI payment is split 70:30, person A's part of the interest goes up to ₹2.8 lakh, but the maximum deduction is ₹2 lakh. You can fully claim Person B's share of ₹1.2 lakh. In this scenario, the total deduction is ₹3.2 lakh.

Soni explains, "The allowable deduction is the interest times the EMI share, up to a maximum of ₹2 lakh per person."

Source: Hindustan Times