Avail EPFO, Income Tax benefits if you go for a home loan, but you will have to do this

Home Loan Benefits: A homebuyer while applying for a home loan needs to take care of certain points as it can help them reap monetary benefits in the future. This can be through his or her Provident Fund or PF account or from Income Tax exemptions. A huge amount of money loss can be saved easily by taking a just a few steps. One of the most important such steps can be to make one's spouse a co-owner. According to tax and investment experts, it's not necessary that the spouse of a home loan applicant be an earning individual to qualify as co-applicant of the home loan. By making one's spouse a co-applicant for the home loan, one can make spouse co-owner of the home or flat. Experts are of the opinion that if one's spouse is a co-owner and co-applicant of the home loan they can avail income tax benefit and PF or EPF withdrawal up to 90 per cent of one's PF or EPF balance for repayment of home loan.

Elaborating upon the income tax benefit that one can avail if one's spouse is a co-owner of the home, Manikaran Singhal, a SEBI registered tax and investment expert said, "For claiming income tax benefit for the spouse, the spouse has to be both co-applicant of the home loan and co-owner of the home. In that case, one can claim income tax exemption under Section 80C on home loan principal repayment. On home loan interest repayment, one can claim income tax benefit on up to Rs 2 lakh under Section 24B of the Income-tax for both himself and for the spouse." 

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Singhal said making one's spouse a co-applicant of the home loan doesn't require him or her to be an earning individual. However, he re-iterated that for claiming income tax benefit on home loan principal and interest repayment under Section 80C and Section 24B respectively, the spouse has to be both co-owner and co-applicant of the home loan.

Highlighting the EPFO facility that one can avail if the property is co-owned by the loan applicant and spouse, Balwant Jain, a Mumbai-based tax and investment expert said, "The provident fund scheme allows you to avail of the withdrawal facility, for repayment of the outstanding balance of a home loan taken by you or your spouse, for any of the above purposes. The amount cannot exceed 36 months’ basic salary and DA. This withdrawal can only be made for repayment of the home loan taken either by the members and/or by the spouse, from specified entities like governments and state governments, registered cooperative societies, state housing board, nationalised banks, public financial institutions, municipal corporations, or any development authority, for purchase of a house. This facility can be taken after you have completed at least 10 years of contribution to the EPF account."