Buying or Owning a Flat Jointly: How Tax, Home Loan Interest and TDS Work for Co-Owners

Couples, siblings and parents with children often buy Mumbai flats together. Joint ownership is common, but each co-owner has their own tax position.

Rental income: each co-owner taxed on their share

Under the house property chapter of the Income-tax Act, 2025, where co-owners' shares are definite and ascertainable, they aren't assessed as a group. Each co-owner is taxed on their share of the rental income, and each applies the deductions to their share.

Home loan interest

• Let-out flat: each co-borrower who is also a co-owner can claim their share of interest, with no upper limit.
• Self-occupied flat (old regime): commentary on the 2025 Act says self-occupied relief is available to each co-owner as if individually entitled, so each can claim interest up to the Rs 2 lakh limit on their own share.
• To claim, you generally need to be both a co-owner and a co-borrower, and actually pay your share of the EMI.

Capital gains when you sell

Each co-owner computes capital gains on their share and can claim exemptions such as section 82 or section 85 separately, if they meet the conditions.