Whether it’s picking the best financing option for tax benefits or directly dealing with the seller to avoid brokerage. One such intelligent way is the decision to register the property jointly, with the spouse.
There are vague benefits of joint registration of property like elevating the status of the wife in a patriarchal society, better bonding, long-term commitment and trust between spouses. However, not many are aware of the financial advantages.
The budget to purchase property is determined by the loan eligibility, which has a specific limit depending on the income. In case of a joint registration, spouses can opt for a joint home loan. It shares the debt burden between two people and paves the way for a higher loan amount as two incomes will be considered. An applicant can obtain a joint home loan along with their spouse, parents or siblings.
According to Suraj Nangia, partner, Nangia & Co., “From a taxation point of view, a joint home loan is beneficial to all co-borrowers who can claim a tax deduction of Rs 1.50 lakh for principal repayment under Section – 80C and Rs 2 lakhs for interest payment under Section – 24. In the case, people taking a joint home loan, each of them can enjoy tax benefits, in respect of the principal & interest paid during a year, on the proportionate basis.
Under section 80C, each joint owner is allowed a deduction of Rs 1,50,000 for principal repayment. They can also claim the deduction on the registration charges & stamp duty charges that they have given for, with total deduction not exceeding Rs 1.5 Lakhs. They can also apply for deduction of housing loan interest from house property income, up to Rs 2 Lakhs each. However, the deduction should not exceed the benefit.
Some states encourage women to hold property individually or jointly through lower stamp duty rates by 1 – 2%. In Delhi, for example, a woman has to pay a stamp duty of four percent and a man has to spend 6% of the market value. In Rajasthan, a woman has to spend four percent as stamp duty whereas, a man has to pay 5% of the market value.
There is a proposal, in Maharastra, to levy a 1% surcharge on stamp duty for new house buyers. This is to finance other base projects in the city. It has gained opposed approval although this is still in a proposal stage because most people consider it to be not fair. Moreover, the proposal has come, at a time when the real estate segment has just begun to emerge from a slump.