Co-ownership in a house property refers to a state where more than one person owns the house and these owners are then referred as co-owners of a house property. These days co-ownership is quite a common scenario. Also, government provides some tax benefits to such co-owners of a house property, nonetheless the extent of tax benefit as well as the duration until when these can be claimed depends on some of these stipulated conditions that need to be met at first:

Conditions to be met to be able to claim or avail tax benefits on property loan

1. You need to be a co-owner in the property: To be eligible to claim tax benefits available to a co-owner in the house property, you should be ensuring that your name is registered in the purchase agreement. Merely take a loan in joint account, does not render the borrowers as co-owner.

2. Also, you must be the co-borrower of the home loan: Besides being the co-owner of the property, you also need to be the loan applicant servicing towards the EMI.

3. Deduction can be claimed only in respect of the constructed property: It is to be noted that tax benefits cannot be claimed in respect of the property that is still under construction. However, if you opt to claim tax benefits on such an under-construction property or property that you decide to construct; the available deduction can only be claimed from the financial year in which the construction gets completed.

Also, there exists a provision employing which you can claim the interest component of the EMI that you paid before the completion of the construction of the house property in 5 equal installments from the financial year in which the construction gets completed. This interest component is referred as pre-construction interest.

Tax benefits which co-owners satisfying above conditions can claim:

1. Deduction on stamp duty and registration charges: In accordance with the provisions of section 80C, the co-owners in a house property can also claim deduction in respect of the stamp duty and registration charges they had paid for. However, it is to be noted that the maximum deduction under this section cannot be over Rs. 1.5 lakhs.

2. Deduction on principal repayment of home loan: Section 80C also provides for deduction on home loan principal repayment for up to a maximum of Rs. 1.5 lakh from the gross total income. In case there are co-owners of a house property, each of them is eligible to claim deduction of up to Rs. 1,50,000 in respect of principal repayment.

3. Deduction on interest paid on home loan up to Rs. 2 lakh from income from house property: Each of the co-owner of a house property can claim deduction up to a maximum of Rs. 2 lakh on home loan interest from income from house property. It is to be noted that this Rs. 2 lakh limit is applicable for self-occupied houses. Additional point, to note here is that the maximum amount claimed using this provision cannot exceed the total interest amount paid.

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