Home loan interest rates are a function of the outside economic environment

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: will again take you back to square one. Therefore, it is always a better idea to prepay the loan and reduce your final liability. This is just the first installment of prepayment. It could so happen that going ahead you may find that you are in a position to prepay still further. You should go ahead and do it. In short, prepaying will always be a better strategy.

My wife and I have taken a joint loan of 80 lakh. We have opened a joint loan account for this and every month, she and I contribute regularly to this account from our individual salary accounts. However, the amount of contribution from both of us is not in the same proportion. She is contributing more than I am. Can we both claim a rebate of 2.5 lakh each? Or is it dependant on the percentage of each individual's contribution to the total EMIs paid at the end of the year? We both own the house in equal proportion.

—Karan Nijher

Since the both of you own the house in equal proportion and assuming your personal equity in the house is either nil or also in equal proportion, you should be paying equal amounts of the EMI. If your wife is contributing more than you, in effect, she is paying for the part of the house that does not belong to her. Take care of this aspect. In any case, on a loan of Rs 80 lakh, your individual interest and principal payment amounts would be much more than Rs 2.50 lakh (Rs 1.50 lakh for interest and Rs 1 lakh for principal) and hence you should be able to claim a collective deduction of Rs 5 lakh.

Can I deposit Rs 70,000 in my PPF account and another Rs 70,000 in my minor son's PPF account? I am not using PPF for Sec 80C purpose.

—Shahade

Irrespective of whether you are taking the Sec 80C deduction on PPF or not, you cannot invest more than Rs 70,000 in the aggregate in your own and your minor son's PPF account.

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