In this article, we shall take a look at some of the advantages of spouses registering property in their name jointly.
Introduction
There are several economic policies that are not purely financial or transactional in nature. Economics has been used to fashion social change as well giving the policies a socio-economic tone. India has traditionally been a patriarchal society especially in terms of property rights. Even as per the law, male members are provided to be natural heirs to property.
Unless expressly relinquished by a male member, women owning property in their name had become a rarity. And so certain economic policies were introduced that incentivised the registration of property in the name of women.
This expanded the scope for women to possess some amount of economic independence even if they do not possess a source of regular income. Thanks to these policies, it is now common practise amongst married couples to co-own properties. Be it for the purpose of choosing the best financial option for the tax advantages or dealing with the seller directly to avoid the brokerage, Jointly Owning Property with the spouse is the most efficient economic recourse.
Registering a joint property is beneficial provided you register it with your spouse. Joint registration of property benefits both. But not many people know the financial benefits that they can enjoy with the jointly owned property. Here, you will get to know the benefits of owning a property jointly as a married couple. These include tax benefits, stamp duty and affordability.
In this article we will discuss the top four benefits of registering a property jointly with the spouse.
Tax Benefits
From the taxation perspective, a joint home loan is advantageous to all the co-borrowers who can claim the tax deduction of Rs.1.5 lakh for principal repayment under Sec 80C of Income Tax Act, 1961 and Rs.2 lakh for interest payment under Sec 24 of the Act. In the situation of two or more individuals taking the joint home loan, each of them will have a privilege to enjoy the tax benefits under the Income Tax Act, in respect to the principal and interest paid during the year, on a proportionate basis. Joint ownership of property husband and wife will be defined now. There are certain Income Tax rules for married couples in India.
Under section 80C of the act, each joint owner is allowed a deduction of Rs.1,50,000 for principal repayment. They are also allowed to claim deduction on the registration and stamp duty for joint ownership charges that they have paid for, with the total deduction, not more than Rs.1,50,000. Furthermore, they can also apply for the deduction of housing loan interest from the house property income, up to Rs.2,00,000 each. However, the deduction should not be more than the interest. However, tax benefits under Section 80C cannot be claimed by an under-construction property.
Stamp Duty and Discounts
Having the joint ownership of the property with the wife will reduce the stamp duty rate by 1% to 2%. This is an initiative taken by the government for the sake of women empowerment in taking the ownership of property jointly or as individuals.
Stamp duty rates in Delhi and Rajasthan are 4% for women whereas 6% for men. In Haryana rural areas, it is 4% for women whereas 6% for men. Again in urban areas of Haryana, the stamp duty for women is 6% whereas men have to pay 8%. In the same way, many states have less stamp duty for women compared to men.
Moreover, many banks such as SBI, ICICI, HDFC etc., offer decent discounts on home loan interest rates to women compared to men. This differs from bank to bank and mostly goes up to nearly one per cent. Lower interest always promises a cost-friendly home loan repayment. The lower interest rate will also lower the monthly installment. The basic rate of discount on home loans for women in India is 0.05%.
Affordability
There is no refuting of the fact that property prices have increased in recent times. These days most couples apply for home loans jointly. Because combined higher income generally promises the higher loan sanction amount. This is one of the convenient ways of lessening the loan repayment burden. By this, the pressure to repay the loan is not on a single person but on two people i.e. husband and wife. Joint registration of property gives benefits.
Succession
Transfer of the property in the case of single ownership is one of the main struggles in India when the owner of the property dies. As it is single ownership the process of transferring the property will now become extremely lengthy and time-consuming. The procedure to get the documents in the name of successor involves excessive confirmation of rules and regulations.
However, all these hurdles can be evaded if it is a jointly owned property. So, jointly owning the property along with your spouse is always a better option to prevent unwanted problems in the future.
Conclusion
These are some of the economic benefits of joint ownership of property with the spouse. There are several other advantages depending on the circumstances, the geographic location and many other factors. In order to understand all the benefits before investing in a property, it is advised to consult with a property law expert who also understands the nuances of taxation when it comes to property rights.
If you have any other queries with regards to property or any other such requirements, get in touch with our team of experts and receive the right kind of assistance for your requirements.
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