Being named on a home-loan account is not, by itself, enough to claim a tax benefit. For an Indian individual’s AY 2026–27 return, eligibility turns on the legally recognised ownership interest, the purpose and terms of the borrowing, who actually paid the qualifying interest or principal, how the property was used, and whether the old or new tax regime applies.
A sole owner who is also liable for and pays a qualifying loan may be able to claim the relevant deductions. A co-owner’s share is generally computed separately when the ownership percentages are definite and ascertainable, with interest allocated by that person’s contribution to interest repayment. The official material does not expressly settle the exact case of a co-borrower who has no ownership interest, so a borrower-only claim should not be promised without reviewing the documents and current law.
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What determines who can claim?
Four records must line up before a claim is safe to make:
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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →- Ownership: the registered title or other legally recognised ownership interest and, for co-owners, a definite and ascertainable share.
- Borrowing: the sanction and loan documents showing borrowed capital used to acquire, construct, repair, renew or reconstruct the property.
- Payment: evidence of the individual’s actual repayment of interest and qualifying principal, not merely a name printed on the loan account.
- Tax treatment: the property’s use (self-occupied or let out), the statutory conditions and the tax regime selected for AY 2026–27.
The Income Tax Department’s house-property guidance says that where co-owners’ shares are definite and ascertainable, each share of property income is computed separately. It also states: “Each co-owner shall be entitled to claim standard deduction and deduction in respect of interest on a home loan according to their contribution in repayment of interest.” See the department’s Let Out House Property | Tax Rules page.
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Interest and principal are separate benefits
Interest: section 24(b)
Section 24(b) addresses interest on borrowed capital used for acquiring, constructing, repairing, renewing or reconstructing a house property. The legal text is on the Income Tax Department’s Section 24 page. The deduction is for qualifying interest payable; it is not a reward for being a borrower in the abstract.
For qualifying self-occupied property, the commonly cited ceiling is ₹2,00,000 when the statutory conditions are met. In other cases covered by the provision, the ceiling is ₹30,000. These are maximum limits, not automatic deductions: the amount must still be supported by the lender’s interest statement and satisfy the property-use and loan conditions.
Principal: section 80C
Qualifying repayment of housing-loan principal is listed under section 80C. Under the old regime guidance for AY 2026–27, section 80C has a combined ceiling of ₹1,50,000 for all eligible payments, so principal repayment shares that limit with other qualifying investments and payments. The section 80C text sets the qualifying conditions and excludes certain post-completion repairs or renovations and amounts already deductible under section 24.
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Do not combine the two figures: ₹2,00,000 or ₹30,000 concerns eligible interest under section 24(b), while ₹1,50,000 is the combined section 80C limit for qualifying principal and other section 80C items under the old regime.
Old and new tax regimes for AY 2026–27
The regime chosen on the return can change the result even when ownership and payment records are identical. The Income Tax Department’s AY 2026–27 guidance is available in its individual return guidance.
| Issue | Old regime | New regime |
|---|---|---|
| Section 80C principal repayment | Included in the section 80C list, subject to the combined ₹1,50,000 ceiling and qualifying conditions. | Not included in the new-regime deduction list in the cited AY 2026–27 guidance. |
| Section 24(b), self-occupied property | May be claimed up to the applicable ₹2,00,000 or ₹30,000 ceiling, depending on statutory conditions. | CBDT’s AY 2026–27 validation rules say interest on borrowed capital cannot be claimed for a self-occupied house property. |
| Section 24(b), let-out property | Claim follows the house-property computation and applicable limits. | The department lists the interest deduction for let-out property, but a resulting house-property loss cannot be set off against other heads or carried forward under the cited guidance. |
The CBDT rule is stated in the AY 2026–27 ITR-3 Validation Rules. The department’s broader explanation of rates and computation is at Tax Rates and Computation. Confirm that the return form and regime selected actually apply to your facts; an HUF-oriented page or a validation rule for a particular ITR should not be treated as a universal answer for every individual return.
Who can claim in common ownership and loan arrangements?
| Arrangement | What the official material supports | What to verify before filing |
|---|---|---|
| Sole owner and sole borrower | Potential eligibility exists if the borrowing, property use, payment and regime satisfy the relevant provisions. | Loan purpose, possession or completion, lender certificate, annual interest, principal paid and the selected regime. |
| Co-owner and co-borrower | Definite ownership shares are assessed separately. Interest deduction follows each person’s contribution to interest repayment. | Registered ownership percentages, each person’s interest payments and a calculation allocating the lender’s annual figures. |
| Co-owner, but loan liability or payments are divided differently from ownership | The department’s stated interest rule points to contribution in repayment of interest, not an automatic full deduction based only on title percentage. | Keep the ownership deed, loan liability terms, bank debits and a written allocation. Obtain advice if the payment pattern and title share diverge materially. |
| Co-borrower but not an owner | The reviewed official pages do not expressly decide this precise configuration. | Do not claim solely because the person is a co-applicant. Have the title, loan contract, payment trail and any recognised ownership interest reviewed under current law. |
| Owner but not named as borrower | The sources do not give a blanket yes or no. Section 24 concerns interest on borrowed capital and section 80C concerns qualifying payments. | Who is legally liable for the debt, who paid the instalments, what the lender certificate says and how the ownership interest is documented. |
How co-owner allocation works
First establish each person’s definite ownership share from the registered deed or other enforceable title document. Then identify the total qualifying interest actually paid during the year from the lender’s certificate. Allocate that interest according to each co-owner’s contribution in repayment, as the department’s house-property guidance directs. A person cannot simply copy the full loan interest into their own return while another co-owner also claims it.
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Illustrative allocation
Suppose two co-owners have documented 60:40 title shares. During the year, the lender certifies ₹3,00,000 of interest. If their bank records show that the first person paid ₹1,80,000 and the second paid ₹1,20,000, those payment amounts provide the starting allocation, subject to each person’s applicable statutory ceiling and regime. If the payments were instead 50:50, the interest allocation would need to follow the actual repayment evidence rather than automatically mirroring the 60:40 title split. This is an illustration of the allocation method, not a ruling on a particular return.
Keep an allocation worksheet showing the lender’s total, each person’s transfers or direct debits, the resulting amount claimed by each co-owner and the limit applied. Consistency between the worksheet, bank statements and the figures entered in each return reduces duplicate-claim risk.
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When the ₹2,00,000 interest ceiling is available
The higher self-occupied ceiling is conditional. Under section 24, the cited conditions include:
- the loan is taken on or after 1 April 1999;
- the borrowed capital is used for acquisition or construction of the property;
- acquisition or construction is completed within five years from the end of the financial year in which the capital was borrowed; and
- the taxpayer obtains a certificate from the lender specifying the interest payable.
If those conditions are not met, the other statutory ceiling may be ₹30,000. The department’s AY 2026–27 summary lists both ₹2,00,000 and ₹30,000, but neither figure guarantees a deduction where the underlying requirement or payment evidence is missing. Repair, renewal and reconstruction also have their own treatment under section 24, so do not assume the acquisition/construction ceiling applies unchanged.
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Property use changes the calculation
Self-occupied property
For a qualifying self-occupied property under the old regime, section 24(b) interest is subject to the applicable ceiling described above. Under the new regime, the CBDT AY 2026–27 validation rule bars a self-occupied interest claim. Principal repayment remains a separate section 80C question and, in the cited guidance, section 80C belongs to the old regime.
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Let-out property
Rental property is computed under the house-property rules, with interest treated separately from the standard deduction. The department’s AY 2026–27 guidance lists section 24(b) interest for let-out property under the new regime but limits the use of a resulting loss: it cannot be set off against other heads or carried forward under that treatment. Calculate the property income and loss within the rules for the chosen regime rather than importing the self-occupied ₹2,00,000 assumption.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What a borrower-only co-applicant should do
A co-borrower who is not on the title is the most commonly misunderstood case. The official sources reviewed do not state that co-borrower status alone creates a section 24(b) or section 80C entitlement, nor do they provide a categorical exclusion for every possible legal arrangement. That gap means a safe answer requires document-level analysis.
Before filing, assemble the title deed, loan sanction and agreement, repayment schedule, lender interest certificate, annual principal statement and bank evidence showing who paid. Check whether any enforceable ownership or beneficial interest is recognised, whether the person is legally liable for the borrowing, and whether the payments were made by that person. Ask a tax professional to apply the current provision to those facts instead of relying on the label “co-applicant.”
Filing checklist for owners and co-owners
- Confirm the regime: record whether the return uses the old or new regime and ensure the relevant ITR form permits the intended claim.
- Prove ownership: retain the registered sale deed, construction agreement, allotment or other document establishing the owner and each definite co-owner share.
- Prove the borrowing: keep the sanction letter and loan agreement showing the lender, borrowers, purpose, sanction date and disbursement.
- Obtain lender figures: download the annual certificate separating interest from principal and retain any certificate needed for the higher section 24 ceiling.
- Trace payments: match instalments and other repayments to bank statements. For co-owners, prepare an allocation that ties each claim to that person’s interest contribution.
- Check completion and possession: preserve the possession, completion or occupancy evidence relevant to the statutory time condition.
- Apply the limits: test section 24(b) interest against the applicable ₹2,00,000 or ₹30,000 ceiling and section 80C principal against the combined ₹1,50,000 old-regime ceiling, after considering other claims.
- Retain the file: keep the calculation, certificates, title papers and payment trail together in case the return is questioned.
Frequent errors and how to correct them
- “My name is on the EMI, so I can claim everything.” Correct the return to reflect qualifying ownership, liability and actual payment; borrower status alone is not the test.
- Both co-owners claim the full interest. Recalculate from the lender’s total and each person’s documented contribution, then amend duplicate figures if necessary.
- Principal is claimed outside section 80C. Move qualifying principal to the section 80C calculation and apply the combined old-regime limit.
- The ₹2,00,000 figure is used without checking completion or certification. Verify the 1 April 1999 loan-date rule, the five-year completion condition and lender certificate before using the higher ceiling.
- Old-regime deductions are entered under the new regime. Recheck the regime selection and the AY 2026–27 validation rules, especially for a self-occupied property.
- Let-out losses are used against salary or carried forward under the new regime. Apply the department’s stated restriction before finalising the computation.
Documents to take to a tax professional
Bring the registered title and ownership-share documents; loan sanction, agreement and disbursement details; lender interest and principal certificates; possession or completion evidence; bank statements showing each payer; the co-owner allocation worksheet; details of other section 80C payments; and the draft return’s regime selection. This set allows the adviser to distinguish legal ownership from loan participation and to test every cap and timing condition without guessing.
Bottom line for each role
Borrower: may qualify, but only after the statutory, payment, property-use and regime tests are met. Co-borrower: cannot rely on the co-applicant label alone, particularly when not an owner. Owner: still needs a qualifying borrowing and payment trail for an interest or principal deduction; ownership by itself is not a cash-payment record. Co-owner: should claim only the amount supported by the person’s definite ownership position and contribution to qualifying repayment, with each co-owner’s property income computed separately where shares are ascertainable.
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