The positive thing about them was that they set aside 25 per cent of their net earnings towards disciplined investment (Rs 30,000 in ULIPs, MFs and bank deposits), which I duly complimented them on.
Considering that they were planning for a loan of around Rs 35 lakhs to Rs 40 lakhs with a 15 to 20 year loan tenure I suggested they purchase the house jointly and also take the home loan as joint applicants. They would then both enjoy tax benefits.
This way the increased take home because of tax savings would provide them some cushion. Simply put, this move will help them make their income exceed expenses.
I also suggested that they split the tax benefit in the ratio of 55:45 between them (Abhishek: Nikita). Interest on home loan can be claimed as 'Loss from House Property' (which stands at Rs 1.5 lakh per annum for each of them) and principal can be claimed as 'deduction U/S 80C' (Rs 1 Lakh limit including other investments for each of them).
Taken together it would translate into Rs 2.5 lakh per annum of tax breaks for each of them.
Also see: Investment trends in 2009
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