Joint home loan tax benefits depend on who owns the house, who repays the loan and which tax regime each person uses. For assessment year 2026-27, an eligible co-owner using the old regime can claim their qualifying share of interest on a self-occupied home, subject to the applicable Rs 2 lakh ceiling. Eligible principal repayment falls within the shared Rs 1.5 lakh deduction basket. Adding a second name to a loan does not automatically double either person's claim.
This guide concerns AY 2026-27, covering financial year 2025-26, and uses the section numbers in the Income-tax Act, 1961. It explains a completed, self-occupied purchase with two co-owners who are also borrowers. The examples assume that all other conditions for the deductions are met. They do not describe rental property taxation or rules for a different tax year.
| Question | AY 2026-27 treatment |
|---|---|
| Self-occupied home interest, old regime | Eligible share, subject to the applicable Rs 2 lakh ceiling per taxpayer |
| Eligible principal repayment, old regime | Within the Rs 1.5 lakh combined deduction limit under sections 80C, 80CCC and 80CCD(1) |
| Self-occupied home interest, new regime | This deduction is unavailable |
| Joint loan alone | Does not establish ownership or a qualifying repayment contribution |
Who can claim joint home loan tax benefits?
HDFC Bank's joint home loan explainer distinguishes a co-owner from a co-applicant. A person can join the borrowing arrangement without owning a share of the house. For the separate tax benefits described by the bank, each claimant must be a co-owner and contribute to repayment. A parent's or spouse's name on the loan application is therefore only one part of the evidence.
Consider two people who own equal shares and service the loan equally. Their starting calculation is half the eligible annual interest and half the eligible principal each. The lender's total certificate should not be copied in full into both returns. Doing that would claim the same payment twice, even though the household made it only once.
Separate records matter when the payment leaves one bank account. A single debit shows that the lender received money, but does not by itself explain the two borrowers' contributions. Keep the ownership document, loan agreement, annual interest statement and records supporting the repayment split together. The figures used by both borrowers should reconcile with the household total.
Joint home loan tax benefit calculation with an example
Assume the lender's annual statement shows Rs 3,60,000 of qualifying interest and Rs 1,20,000 of eligible principal repayment. Both owners have equal ownership and repayment shares, both validly use the old regime, and neither has other payments using the relevant principal deduction limit. These are invented teaching figures, not a bank quote or a promised saving.
The calculation is: individual interest share = annual eligible interest multiplied by repayment share. Here, Rs 3,60,000 multiplied by 50% equals Rs 1,80,000 each. Because that is below Rs 2 lakh, both can claim Rs 1,80,000 under the assumptions. Their principal shares are Rs 1,20,000 multiplied by 50%, or Rs 60,000 each.
Each person's combined deductions in this example are Rs 2,40,000: Rs 1,80,000 of interest plus Rs 60,000 of principal. That is an amount deducted in the tax computation, not a Rs 2,40,000 cash refund. The change in final tax depends on the individual's taxable income, applicable rates and other provisions.
Now change only the annual interest to Rs 5,00,000. The equal share becomes Rs 2,50,000 per person. With the applicable self-occupied ceiling of Rs 2,00,000, each claim is restricted to Rs 2,00,000. The combined interest deduction becomes Rs 4,00,000, rather than the whole Rs 5,00,000 paid. Two borrowers create two individual calculations, not an exemption from the ceilings.
How other deductions and the new regime change the answer
The Income Tax Department's AY 2026-27 guide lists housing loan principal within the combined Rs 1.5 lakh basket. Suppose one borrower already has Rs 1,20,000 of other qualifying payments within that basket. Only Rs 30,000 of room remains. Their Rs 60,000 principal share from the first example would produce a Rs 30,000 additional deduction, assuming eligibility.
If one co-owner uses the new regime, that person's self-occupied interest and section 80C principal deductions are unavailable. The other person's claim still follows their own eligible share and limits. The unavailable deduction cannot simply be transferred across to the other borrower. Choosing a regime also involves the rest of the person's income and deductions.
What should borrowers check before using the certificate?
Check the property type, completion conditions and purpose of borrowing before applying the headline limit. The department's guide lists a lower Rs 30,000 interest limit for specified cases, including repair loans. HDFC Bank's home loan tax benefit guide also explains completion conditions and restrictions on principal claims. An EMI debit alone does not settle tax eligibility.
For the payment breakdown, see our home loan EMI example. Borrowers obtaining supporting records can read the SBI interest certificate guide. The AY 2026-27 deduction explainer provides related context on the shared limits.
