In short
Buying with a spouse, parent or sibling raises two separate questions: who owns the property and who owes the loan. For income tax, which is a central law and the same in every state, the Income-tax Act, 2025 (in force from 1 April 2026) taxes co-owners separately on their definite and ascertainable shares (section 24), and the ₹2,00,000 interest relief for a self-occupied house applies to each co-owner individually. Whether a lender’s rules, state stamp duty concessions or the PMAY subsidy treat joint borrowers more favourably is a matter of the rule of each, set out below.
Owner and borrower are not the same thing
A co-owner is a person named in the title (the sale deed). A co-borrower is a person who signs the loan and is liable for repayment. They can be the same people, but the law does not make them so. For income tax, what counts for the deductions is both facts at once: being an owner of the property (section 25 widens “owner” to cover, for example, a person who gets a house without adequate consideration from a spouse) and having interest payable on capital borrowed (section 22(1)(b)). Ask the lender whether it needs every co-owner to be a co-borrower. We did not find an official RBI rule that requires it either way, so treat the lender’s statement as its policy and have it in writing.
How tax treats co-owners
Section 24 of the Income-tax Act 2025 says that where a property is co-owned with definite and ascertainable shares, the co-owners “shall not be assessed as an association of persons” and each one’s income from the property, computed under that Part according to their share, is included in their own total income. It also says that the relief available under section 21(6) (annual value of a self-occupied house taken as nil) “shall be provided as if each co-owner is individually entitled to the said relief”.
In practice, for the deductions described in home loan tax benefits:
| Deduction | Rule in the 2025 Act | Co-owners |
|---|---|---|
| Interest, self-occupied house (section 22(2), (5)) | Up to ₹2,00,000 a year, with a lender’s certificate and completion within five years of the year of borrowing; ₹30,000 otherwise | Each co-owner is entitled individually, on their own share (section 24(2)) |
| Principal, stamp duty and registration (section 123, Schedule XV) | Up to ₹1,50,000 a year for an individual or Hindu undivided family, shared with other Schedule XV items | Per individual |
| Both deductions | Only under the old regime. The default regime (section 202) excludes the interest deduction on a self-occupied house and the section 123 deduction | Each co-owner chooses their own regime on their own return |
Two points follow from the text. First, the deduction is tied to interest payable and to ownership, so keep the loan statement and the lender’s certificate in the form the lender gives each person. Second, the shares must be definite and ascertainable: a deed that says nothing about shares makes the tax computation harder. Ask your lawyer to record them. We did not find in the Act a rule on how repayments made by one co-borrower for the benefit of another are treated, and we do not give one.
What the share means for sale
When the property is sold, each co-owner is taxed on their own share of the gain. See capital gains tax on property. If the property is shared between family members, put the arrangement in writing and have it checked.
PMAY-Urban 2.0: the family counts as one
Under the Interest Subsidy Scheme guidelines, if two or more family members take a combined or separate loan on the same property, they are treated as the same family for the calculation of family income and benefit (section 5.4.5(ii)). The family means husband, wife and unmarried sons and daughters. Also, houses acquired with central assistance should be in the name of the female head of the household or in the joint name of husband and wife, except in the cases the Guidelines list (section 1.8). See PMAY-Urban 2.0.
Stamp duty when a woman is a co-owner
Stamp duty is a state subject, and a state may treat a deed in a woman’s name differently. Read stamp duty concession for women for each state’s rule before you choose the names on the deed, because the names may change the stamp duty.
Prepayment and co-obligants
The RBI Directions on pre-payment charges mention loans “with or without co-obligant(s)” for business-purpose loans (paragraph 5(ii)). For non-business floating-rate loans to individuals sanctioned on or after 1 January 2026 the bar on pre-payment charges is in paragraph 5(i). See home loan prepayment charges.
What to settle in writing
- the share of each owner in the property, and in the down payment;
- who pays the EMI, and how part-payments and the lender’s interest certificate are handled;
- what happens if one party cannot pay, wishes to sell or dies;
- the tax regime each of you uses, because the choice is personal.
None of this is legal advice: it is a list of questions to take to a property lawyer.
What it costs
The tax deductions have no fee. If a name is added to the title later, expect stamp duty and registration on the new deed, as set by the state; see stamp duty and registration charges in India.
Which professional to consult
A property lawyer (an advocate enrolled with the State Bar Council) for the deed and the co-ownership agreement; a chartered accountant for the tax; the home loan lender for the loan terms.
Frequently asked questions
Can each co-owner claim the ₹2 lakh interest deduction?
Under section 24(2), relief under section 21(6) is provided as if each co-owner is individually entitled. The ₹2,00,000 cap of section 22(2) applies to each person’s own deduction, on their share, and only if they are in the old regime.
Do I need to be a co-owner to claim the interest?
The Act ties the deduction to the property income of the owner. Section 25 explains who counts as owner. Ask a chartered accountant about your case.
Does adding my spouse to the deed change the stamp duty?
It can: stamp duty is a state subject. See the guide on the concession for women.
Are joint borrowers one family for PMAY?
Yes, for the interest subsidy: family members with a combined or separate loan on the same property are treated as one family.
Can the lender ask for a guarantor instead of a co-borrower?
That is the lender’s policy. We found no RBI rule on it in the texts we read.
More guides on financing
Sources
- Income-tax Act, 2025 (Gazette of India Extraordinary), sections 21 to 25, 123, 202 and Schedule XV (consulted 14 October 2026)
- PMAY-Urban 2.0 Scheme Guidelines (MoHUA) (consulted 14 October 2026)
- Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025 (consulted 14 October 2026)
- TDS compliance: which Act applies (Income Tax Department) (consulted 14 October 2026)