Tax exemption on joint home loan


KF Ace
I and my father are co-borrowers of a property and loan EMI gets deducted from my account. Since we can claim upto 2L interest deduction under section 24B and upto 1.5L principal repayment under section 80C. I got to know that we cannot claim section 24B along with HRA if property address and rental address are in the same city and close by.
Is it possible that one co-borrower claims under section 24B and the other claim principal repayment(under 80C) along with HRA?
Yes, it is possible for you and your father, as co-borrowers of a property, to claim different tax benefits under the conditions you mentioned. Here's how:
Claiming HRA and Principal Repayment (80C):
  • If you are residing in a rented accommodation in the same city as the co-owned property, your father can claim the principal repayment of the home loan up to Rs. 1.5 lakh under Section 80C. This is because he is also a co-borrower and contributing to the loan repayment.
  • You can claim exemption on your HRA allowance under Section 10(13A) as per the usual rules. This exemption depends on factors like rent paid, basic salary, and HRA received.
Claiming Interest Deduction (24B):
  • Since you are paying the EMIs from your account, you can claim the home loan interest deduction up to Rs. 2 lakh under Section 24B. This applies even if the property and your rented accommodation are in the same city.
Important Points:
  • The total loan amount and interest should be clearly divided and documented between you and your father to reflect the respective claims accurately.
  • Ensure you have all the necessary documents for claiming each deduction, such as loan agreement, rent agreement, HRA statement, etc.
  • It's advisable to consult a tax advisor for personalized guidance and to ensure proper compliance with tax regulations based on your specific circumstances.
Remember, claiming both HRA and interest deduction on the same property is allowed even if the locations are close, as long as one co-borrower claims HRA and the other claims interest deduction with proper documentation.
I hope this clarifies the possibilities for claiming different tax benefits in your situation.