For Indian income-tax purposes, being named together on a home loan does not by itself give spouses the right to choose any split of the deductions. Start with the ownership shares shown in the property documents, then establish the eligible interest, property use, payment trail and tax-year rules. For returns for Assessment Year (AY) 2026–27, the Income Tax Department’s current guidance describes co-owner treatment and Section 24 interest deductions, but does not resolve every case where ownership shares and EMI contributions differ.
How do we split home-loan tax deductions if both spouses are co-borrowers?
In India, do not assume that co-borrower status automatically entitles each spouse to claim half the home-loan interest—or that the spouses may assign the entire claim to whichever return produces the largest household tax saving. The Income Tax Department’s house-property guidance says that when co-owners’ shares are definite and ascertainable, house-property income is assessed separately for each co-owner in proportion to that person’s share. Section 24 provides the framework for deducting qualifying interest on borrowed capital, subject to its conditions and applicable limits.
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Those rules make the registered ownership share a key starting point, but they do not answer every possible combination of ownership, loan liability and who actually paid the EMIs. The official guidance reviewed does not expressly settle all such mismatches. If the deed says one thing and the payment trail or loan documents suggest another, do not invent a convenient allocation: have the facts reviewed by an Indian tax professional before filing.
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This article is about India, using current Income Tax Department guidance amended through Finance Act 2025 and the filing instructions for AY 2026–27. It is not a universal rule for other countries. Tax treatment can change with the country, tax year, property use and filing circumstances.
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Why co-borrower status and ownership are different
Being liable for the loan is not the same as owning the property
A co-borrower is named on the loan obligation. A co-owner has a share in the property. Those roles can overlap, but one does not prove the other. Check the registered sale deed or other relevant title document for the ownership shares; do not infer the shares solely from whose name appears on the loan account or who makes the monthly payment.
The Income Tax Department’s published co-owner guidance addresses property shares that are “definite and ascertainable.” Where the shares can be established, it says house-property income is assessed separately in proportion to those shares. Where the shares are not definite, the guidance describes assessment as an Association of Persons. It also says a co-owner may claim self-occupied treatment for their share subject to prescribed conditions.
Interest eligibility still needs to be established
Section 24(1)(vi) concerns interest payable on borrowed capital used to acquire, construct, repair, renew or reconstruct property. A loan label or joint account statement alone does not show that every amount paid qualifies. Keep the lender’s annual interest certificate and supporting loan records, and distinguish interest from principal repayment.
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Principal repayment is not part of the Section 24 interest calculation. It may be relevant under a separate provision if its distinct eligibility requirements are met. Do not combine principal and interest into one home-loan deduction figure when preparing or checking the returns.
Which Indian interest limit may apply?
The Income Tax Department’s current house-property guidance gives an aggregate interest deduction limit for up to two self-occupied homes. The applicable figure is ₹30,000 or ₹2,00,000, depending on the statutory circumstances. These are limits, not automatic deductions: the eligible amount and applicable cap depend on the facts and rules for the relevant tax year.
| Self-occupied property interest limit | What the guidance establishes | What to check |
|---|---|---|
| Up to ₹30,000 aggregate | The lower limit applies in specified circumstances under the Income Tax Department’s house-property guidance. | Check the conditions applying to the loan and property for the relevant tax year. |
| Up to ₹2,00,000 aggregate | The higher limit may apply when the applicable statutory conditions are met; the Department identifies loan purpose and date, completion timing and a lender certificate among the relevant conditions. | Verify that each required condition is satisfied and that the tax regime permits the claim for the year concerned. |
The figures above are the Department’s stated aggregate limits for up to two self-occupied properties, not separate caps automatically available to each spouse for the same home. The amount a particular taxpayer can claim depends on the eligible interest and the rules that apply to that taxpayer and property. Confirm the tax regime and tax-year treatment before relying on either figure.
How to work out the returns without guessing
- Confirm the jurisdiction, year and filing position. Establish that the property and return are subject to Indian tax rules, identify the relevant financial year and assessment year, and check each spouse’s tax regime and filing circumstances. Do not carry a figure or treatment forward from a prior year without checking current rules.
- Read the ownership document. Record each spouse’s stated share from the registered title document. If the shares are unclear, inconsistent across documents or disputed, resolve that issue before treating a particular percentage as established.
- Obtain the lender’s annual interest certificate. Identify the interest payable for the relevant period and retain the loan account statement or other records needed to reconcile it. Section 24’s text calls for a lender or payee certificate in relevant acquisition, construction or refinancing circumstances.
- Separate the interest and principal figures. Use the interest amount for a Section 24 analysis. Keep principal repayment separate and assess it under its own rules rather than adding it to interest.
- Reconcile the documents with actual payments. Compare the lender records with bank statements or other payment evidence. Record which account funded the EMIs and whether the account was jointly or individually held. These facts help explain the claim, but do not alone settle a mismatch between who paid and who owns the property.
- Classify the property’s use. Determine whether it is self-occupied, let out or otherwise used, and apply the relevant house-property treatment. Do not apply the self-occupied limits to a property without checking its actual use and the rules for the year.
- Prepare each return consistently. Use the ownership, loan, interest and property-use facts to determine each spouse’s reporting. Check that the two returns do not together claim more than the eligible interest, and retain an explanation and records for any allocation that could be questioned.
- Get tailored advice if the facts do not line up. If deed shares, borrower names and actual payments differ, or the applicable treatment is uncertain, consult a chartered accountant or tax adviser before filing rather than reallocating the claim solely to reduce tax.
What to keep in your records
A sound claim should be explainable from the documents, not just from a spreadsheet showing a chosen percentage. Keep a file for the relevant year with records that establish ownership, the loan and interest, payment source and property use.
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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minute- The registered property document showing each owner’s share.
- The loan sanction and account documents identifying borrowers and the loan purpose.
- The lender’s annual interest certificate and loan account statement.
- Bank statements or other payment records showing how EMIs were funded.
- Documents supporting the property’s use, such as records relevant to whether it was self-occupied or let out.
- Copies of both spouses’ filed returns and a reconciliation of the interest reported by each.
The certificate from the lender supports the amount and character of interest claimed in relevant circumstances. It does not, by itself, establish the spouses’ beneficial ownership shares or prove who funded the payments. Keep those parts of the evidence separately.
What the AY 2026–27 return fields do—and do not—tell you
The Income Tax Department’s e-filing FAQ says that a single-property joint owner may file ITR-1 for rental income in AY 2026–27, and that ITR-1 permits disclosure of up to two house properties from AY 2026–27. It also says the Section 24(b) schedule, added from AY 2025–26, asks for details including the lender or source, institution or bank, loan account number, sanction date, total loan amount, year-end outstanding amount and interest on borrowed capital.
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These instructions help taxpayers understand what information the form requests. They are not a complete ruling on how spouses must allocate interest when their ownership shares, borrower status and payment contributions differ. A form accepting a number does not establish that the number is substantively allowable. Use the return fields to report a claim supported by the underlying facts and current rules.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Example: equal ownership does not erase the need for evidence
Suppose a couple owns a qualifying Indian home in equal registered shares, both spouses are borrowers, and the lender issues an annual certificate showing interest payable. The equal title shares give them a clear starting point for examining co-owner treatment. They still need to establish the eligible interest, property-use treatment, applicable tax regime and tax-year limit, and reconcile the certificate with the payment records before deciding what each return should report.
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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsIf instead the deed gives one spouse a larger share while the other spouse funds most or all of the EMIs, do not simply apply the deed percentage to every amount or shift the interest claim to the payer without review. The Department’s published guidance establishes proportional treatment of house-property income when co-owner shares are definite, and Section 24 sets the interest framework; the reviewed official materials do not expressly settle every such ownership-versus-payment mismatch. A professional should assess the actual documents and applicable facts.
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Why the answer may differ outside India
There is no worldwide rule for splitting mortgage or home-loan deductions. For example, US IRS guidance discusses eligible spouses filing separate returns who pay expenses from equally owned joint funds: it says they should generally split the deduction equally. That instruction belongs to the US tax context and does not establish how Indian spouses allocate a Section 24 claim.
In the United States, IRS Publication 936 (2025) also addresses more than one borrower when a borrower other than the taxpayer receives Form 1098, including reporting and statement instructions for separate returns. Those US forms and line references should not be used to prepare an Indian return. Anyone filing outside India should check the rules for that country, tax year and filing status.
