Wife as Co-Borrower Cannot Claim Home Loan Tax Benefit Without Ownership

A wife named only as a co-borrower on a home loan cannot claim tax deductions unless she also owns the property and contributes to repayment.

ET Online, in a report published on 3 April 2026, highlighted a tax position many joint borrowers miss while filing returns. The issue is simple: a spouse’s name in the loan file does not automatically create a tax claim. For home-loan deductions, ownership of the house and actual repayment from the claimant’s own income are both relevant. 

This becomes more important now because the new tax regime is the default regime from AY 2024-25, and key home-loan benefits for self-occupied property are available only if the taxpayer opts for the old regime.

What The Law And Recent Reports Actually Show?

The latest trigger is ET Online’s 3 April 2026 report, which said a wife cannot claim income-tax deductions merely because she is a co-borrower if she has no ownership rights in the property. The same report also noted that even where her name is added as co-owner, eligibility can still depend on whether she has actually contributed to repayment.
 

The wider framework is unchanged. The Income Tax Department’s FAQ released in July 2024 says interest on borrowed capital for a self-occupied property is not allowed in the new tax regime. 

ClearTax’s guides updated on 26 March 2026, 9 March 2026 and 7 May 2025 also say that in a joint home loan, each person can claim up to Rs 2 lakh under Section 24(b) for interest and up to Rs 1.5 lakh under Section 80C for principal, but only if that person is also a co-owner and co-borrower.

How This Position Developed Over Time?

This is not a new interpretation. Tax platforms and lenders have repeated it for years, but confusion stayed because banks often insist on adding a spouse as co-borrower for eligibility or risk reasons. That loan structure helps sanctioning, but it does not by itself create ownership in the property.

LoansJagat, in its article published on 9 December 2025, said only co-owners can claim tax benefits under the Income Tax Act when co-applying for a home loan.
 

In another article published on 15 January 2026, LoansJagat also flagged Section 24(b) as a key deduction route and advised borrowers to keep loan documents and interest certificates ready.

What Stakeholders Are Saying?

ET Online said tax deduction is not available without ownership rights. The Income Tax Department’s FAQ states that self-occupied home-loan interest is not deductible in the new regime.

Conclusion

For joint home-loan tax claims, names on the loan alone are not enough. The title deed, repayment trail and chosen tax regime now decide who can claim what.