Property may be owned either singly or jointly. Joint ownership connotes equal rights to use the property along with equal title.
When two or more persons are joint owners of a property, it is understood that there is unity in title, possession, interest and commencement of title.
Common ownership, in contrast with joint ownership, has unity of possession and commencement of title, but the other two features, unity of interest and title, are missing.
Another feature that distinguishes joint ownership from common ownership is that in the former succession is by If an absolute owner converts his absolute interest into a joint interest, it would involve making his absolute claim to the property subservient to the claim of the other joint owner.
Joint ownership of property has its advantages. In case one co-owns the property with his spouse, there are many benefits. Both husband and wife can get tax benefits.
Moreover, the couple are eligible for a higher loan amount. This is because their incomes can be clubbed to determine the loan eligibility.
As an individual, one's income may not be enough to raise the full amount required to purchase a property. In case the wife has a separate source of income, one can club his wife's income to enhance the loan eligibility and possibly oint ownership means tax benefits are available for both husband and wife. Thus, if a husband and wife have a property with equal shares, both are entitled to claim these deductions.
A house should be bought in joint names and proof of co-ownership should be maintained. Secondly, the housing loan should also be taken in joint names.
The repayment of the loan should preferably be made individually by the co-owners directly, if feasible, or from a joint bank account in which funds for repayment of the loan should be contributed by the co-owners in proportion to their ownership or share of loan availed.
All the co-owners should have their independent income sources from which the loan is repaid. The tax benefits are available in proportion to the joint ownership shares and the loan taken by the coowners.In case of a joint ownership, the husband as well as wife individually will be able to claim deductions under Section 24 of the Income Tax Act, for up to Rs 1.5 lakhs towards the interest component.
A precondition is that the proportion of shares must be specified in the agreement, or else the coowner will not be able to claim any deductions.
Joint ownership also enables easier pledging of property. Future borrowing for any other purpose becomes easier. Any of the joint owners can easily pledge the property.
Joint ownership enables easy transfer. If it's a joint ownership, it's easier for both to nominate their children as the future owners of the property.
But if your spouse is the sole owner of your house, he/she would have to nominate his/her partner as the future owner and subsequently the latter would have to nominate the children.In case of a joint ownership, the husband and wife have equal rights in the property and their interests are secured. In case of joint owners of property, the property devolves upon the surviving joint owners. There would not be any requirement of legal heir certificate.
After the demise of the owners, the transfer of property to the children is easier. If a property is jointly owned and one of the individuals is no more, the property can be easily transferred to the coowner with minimum legal hassles. But if it is not, there can be various issues.
Focal point
The tax benefits are available in proportion to the joint ownership shares and the loan taken by the co-owners. In case of a joint ownership, the husband as well as wife individually will be able to claim deductions under Section 24 of the Income Tax Act, for up to Rs 1.5 lakhs towards the interest component.
Courtesy: Economic Times
When two or more persons are joint owners of a property, it is understood that there is unity in title, possession, interest and commencement of title.
Common ownership, in contrast with joint ownership, has unity of possession and commencement of title, but the other two features, unity of interest and title, are missing.
Another feature that distinguishes joint ownership from common ownership is that in the former succession is by If an absolute owner converts his absolute interest into a joint interest, it would involve making his absolute claim to the property subservient to the claim of the other joint owner.
Joint ownership of property has its advantages. In case one co-owns the property with his spouse, there are many benefits. Both husband and wife can get tax benefits.
Moreover, the couple are eligible for a higher loan amount. This is because their incomes can be clubbed to determine the loan eligibility.
As an individual, one's income may not be enough to raise the full amount required to purchase a property. In case the wife has a separate source of income, one can club his wife's income to enhance the loan eligibility and possibly oint ownership means tax benefits are available for both husband and wife. Thus, if a husband and wife have a property with equal shares, both are entitled to claim these deductions.
A house should be bought in joint names and proof of co-ownership should be maintained. Secondly, the housing loan should also be taken in joint names.
The repayment of the loan should preferably be made individually by the co-owners directly, if feasible, or from a joint bank account in which funds for repayment of the loan should be contributed by the co-owners in proportion to their ownership or share of loan availed.
All the co-owners should have their independent income sources from which the loan is repaid. The tax benefits are available in proportion to the joint ownership shares and the loan taken by the coowners.In case of a joint ownership, the husband as well as wife individually will be able to claim deductions under Section 24 of the Income Tax Act, for up to Rs 1.5 lakhs towards the interest component.
A precondition is that the proportion of shares must be specified in the agreement, or else the coowner will not be able to claim any deductions.
Joint ownership also enables easier pledging of property. Future borrowing for any other purpose becomes easier. Any of the joint owners can easily pledge the property.
Joint ownership enables easy transfer. If it's a joint ownership, it's easier for both to nominate their children as the future owners of the property.
But if your spouse is the sole owner of your house, he/she would have to nominate his/her partner as the future owner and subsequently the latter would have to nominate the children.In case of a joint ownership, the husband and wife have equal rights in the property and their interests are secured. In case of joint owners of property, the property devolves upon the surviving joint owners. There would not be any requirement of legal heir certificate.
After the demise of the owners, the transfer of property to the children is easier. If a property is jointly owned and one of the individuals is no more, the property can be easily transferred to the coowner with minimum legal hassles. But if it is not, there can be various issues.
Focal point
The tax benefits are available in proportion to the joint ownership shares and the loan taken by the co-owners. In case of a joint ownership, the husband as well as wife individually will be able to claim deductions under Section 24 of the Income Tax Act, for up to Rs 1.5 lakhs towards the interest component.
Courtesy: Economic Times
