Joint home with your spouse: how the sale deed's shares decide tax, the loan and succession

Rules and rates as of 17 October 2026.

Couples buying a flat together usually put both names on the sale deed, but the deed often just lists two names without saying who owns what. That gap matters for three things later: how much income tax each of you saves, what happens to the loan, and who gets the flat if one of you dies. This explainer goes through each, using the Income-tax Act, 2025 (in force from 1 April 2026), the Transfer of Property Act, 1882 and the Hindu Succession Act, 1956.

What the deed says, and what the law fills in when it is silent

A sale deed can state shares outright: "in equal shares", or 60:40, or 70:30. If it does, that is your share, and it is the starting point for tax and succession.

If the deed only names you both, section 45 of the Transfer of Property Act supplies a default, unless you have a contract saying otherwise:

• If the price was paid from a common fund, each buyer's share in the flat matches their share in that fund.
• If each paid from separate money, each buyer's share is proportional to what they put in.
• If there is no evidence of either, the buyers are presumed to own equal shares.

So a silent deed does not automatically mean 50:50. It means "whatever the money trail shows, and 50:50 only if nothing shows anything". That invites argument later, especially after a death. Writing the shares into the deed at registration removes the guesswork.

Tax: each co-owner is taxed on their own share

Under section 24 of the 2025 Act (formerly section 26 of the 1961 Act), where co-owners' shares are "definite and ascertainable", they are not taxed together as an association of persons. Each co-owner's share of the house-property income is worked out separately and added to their own income. Sub-section (2) gives the self-occupied benefit of section 21(6) (nil annual value for a home you live in, for up to two houses) to each co-owner as if each were individually entitled to it.

The home-loan interest deduction follows from this. Section 22(1)(b) allows interest on money borrowed to buy or build the property, and section 22(2)(a) caps it at ₹2,00,000 a year for a self-occupied house acquired or built within five years from the end of the tax year of borrowing, with the lender's interest certificate. Because each co-owner computes their own income, each has their own ₹2,00,000 cap on their share of the interest. Principal repaid counts within each person's ₹1,50,000 limit under section 123 (formerly 80C).

Two conditions keep this from being automatic:

• Regime. Under the new regime in section 202, clause (2)(a)(v) disallows interest on a self-occupied house and clause (2)(a)(xii) disallows Chapter VIII deductions, which include section 123. These deductions only help a spouse who opts out of the new regime with their return.
• Being a borrower too. The deduction is for interest on money borrowed for the property. A co-owner whose name is not on the loan has a weaker claim; our earlier explainer on co-owners and co-borrowers covers this, and a chartered accountant should look at your facts.

The clubbing catch when one spouse pays for both

Suppose the deed says 50:50 but the husband paid the entire down payment and every EMI from his salary. Section 99(1)(a)(ii) adds to an individual's income whatever their spouse earns from assets transferred to the spouse, "directly or indirectly", without adequate consideration, other than under an agreement to live apart. Money given to a spouse to buy their share is such a transfer, so rent from the wife's half may be taxed in the husband's hands. Whether it is in a particular case depends on the facts: whose money paid for what, and whether the wife repays her share. This is a question for a CA, but the practical habit is simple: pay each person's share of the price and EMIs from that person's own account.

The loan is a separate contract

The sale deed decides who owns the flat. The loan agreement decides who owes the bank. They need not match: a lender may make both spouses co-borrowers even if the deed is 80:20, and the ownership split does not limit what the bank can recover. If your loan agreement makes the borrowers "jointly and severally" liable, the lender can recover the whole outstanding amount from either of you, whatever the deed says about shares. Read that clause before signing, and keep a copy.

On a death, the survivor's liability is still whatever the loan agreement says, and the flat stays mortgaged until the loan is closed.

Succession: the survivor does not automatically get it all

This is where the deed's shares matter most, and where couples are most often surprised. Joint ownership in India does not, by itself, mean the surviving spouse takes the other's share. Each co-owner owns a distinct share, and on death that share passes under their will or, without a will, under the succession law that applies to them.

For a Hindu man who dies without a will, section 8 of the Hindu Succession Act sends his property first to his Class I heirs. These include his widow, sons, daughters and mother. Under section 10, the widow takes one share, and each surviving son, each daughter and the mother take one share each. For a Hindu woman who dies without a will, section 15(1)(a) gives her property first to her sons, daughters (including children of a predeceased child) and husband. Other communities follow different laws; ask a lawyer.

A co-owner can leave their own share by will (section 30 of the Hindu Succession Act permits Hindus to dispose of property by will). A will can therefore give the share to the surviving spouse if that is what you want. Without one, the survivor shares the flat with in-laws or children.

Worked example: a 60:40 flat, the tax and the succession

Arjun and Kavya (an illustrative couple, both Hindu, both in the old regime) buy a ₹1,20,00,000 flat that they live in. The deed records Arjun 60%, Kavya 40%. Both are co-borrowers on an ₹80,00,000 loan at an illustrative 8.5% a year for 20 years.

EMI = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1], with P = ₹80,00,000, r = 0.085 ÷ 12 and n = 240. This gives ₹69,426 a month. Over the first 12 EMIs, interest (balance × r each month) adds up to ₹6,73,892 and principal to ₹1,59,218.

• Arjun's interest share is 60% × ₹6,73,892 = ₹4,04,335, capped at ₹2,00,000. His principal share is ₹95,531.
• Kavya's interest share is 40% × ₹6,73,892 = ₹2,69,557, also capped at ₹2,00,000. Her principal share is ₹63,687.
• Together they claim ₹4,00,000 of interest. If only Arjun owned the flat, the household would claim ₹2,00,000.

Now suppose Arjun dies without a will, survived by Kavya, two children and his mother. His 60% goes to four Class I heirs in equal shares of 15% each. Kavya ends up with 40% + 15% = 55% (₹66,00,000 of the flat's value); each child and Arjun's mother hold 15% (₹18,00,000 each). Selling or remortgaging the flat later needs all four. With a will leaving his share to Kavya, she would own 100%.

How the first-year interest claim changes with the split, on the same loan:

Shares on the deed (A:B)	A's interest share	B's interest share	A claims	B claims	Household total
50:50	₹3,36,946	₹3,36,946	₹2,00,000	₹2,00,000	₹4,00,000
60:40	₹4,04,335	₹2,69,557	₹2,00,000	₹2,00,000	₹4,00,000
80:20	₹5,39,114	₹1,34,778	₹2,00,000	₹1,34,778	₹3,34,778
100:0	₹6,73,892	nil	₹2,00,000	nil	₹2,00,000

This assumes both are borrowers paying in their ownership shares, in the old regime. Tax saved depends on each person's slab.

What to settle before you register

• Write the shares into the sale deed in plain numbers rather than leaving them to section 45.
• Match the shares to who is paying: each person's contribution from their own account.
• Read the loan agreement's liability clause, and make sure both co-owners are on the loan if both want the interest deduction.
• Each spouse should make a will covering their share. A nomination with a lender or society is not a substitute for one.

A lawyer can draft the share clause and the wills; a CA can check the regime and any clubbing risk.