# Joint Ownership / Co-Ownership — Section 26

When a house property is owned by more than one person, and their respective shares are definite and ascertainable, each co-owner is taxed individually.

## Rule for Let-out Property

1. Compute the income from house property normally as if there were a single owner.

2. Divide the resulting income among co-owners in their ownership ratio.

Each co-owner then includes only his/her share in their personal computation.

## Rule for Self-Occupied Property

This is the student-favourite question.

Each co-owner is treated as having a self-occupied property to the extent of his share.
The interest deduction limit of ₹30,000 / ₹2,00,000 under Section 24(b) is available SEPARATELY TO EACH CO-OWNER, not in aggregate.
This is a significant benefit — two co-owners can together claim up to ₹4,00,000 interest deduction (₹2,00,000 each).

## Practical Significance

The co-ownership route is a popular tax planning structure for self-occupied homes financed by joint home loans, because it effectively doubles the interest deduction cap.

Worked example

### Example 1

Question (Let-out): A and B own a let-out property in the ratio 60:40. Income from house property (after all deductions) is ₹5,00,000.

Solution:

A's share = 60% × ₹5,00,000 = ₹3,00,000
B's share = 40% × ₹5,00,000 = ₹2,00,000
Each includes his share in his own return.

Question (Self-occupied): Husband H and wife W jointly own (50:50) a self-occupied flat. They jointly took a home loan and total interest accrued during PY 2025-26 is ₹4,50,000.

Solution:

H's share of interest = ₹2,25,000 → capped at ₹2,00,000
W's share of interest = ₹2,25,000 → capped at ₹2,00,000
Loss from house property in H's hands = (₹2,00,000); in W's hands = (₹2,00,000)
Total family-level deduction = ₹4,00,000

⚠️ Common exam mistakes

Splitting the ₹2,00,000 interest limit among co-owners (treating it as an aggregate cap). The cap applies per co-owner for self-occupied property.
For let-out property, computing each co-owner's GAV / NAV separately. The correct approach is to compute the whole income, then divide.

Bare-Act text Section 26 · Income-tax Act, 1961 · click to expand

Section 26: Where property consisting of buildings or buildings and lands is owned by two or more persons and their respective shares are definite and ascertainable, such persons shall not in respect of such property be assessed as an association of persons, but the share of each such person in the income from the property shall be included in his total income.

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