Home loan tax benefits in India: Sections 24(b) and 80C
What you can claim on home loan interest and principal, and how the old and new tax regimes differ.
Home loans can reduce your tax — but the benefits depend on the tax regime you choose.
Old tax regime
- Section 24(b) — interest on a loan for a self-occupied home: deduction up to ₹2 lakh a year
- Section 80C — principal repayment, stamp duty and registration: within the overall ₹1.5 lakh limit
- Let-out property — interest is deductible against rental income; the loss set-off against other income is capped
New tax regime
- No deduction for interest on a self-occupied home
- For a let-out property, interest can be deducted from rental income, but the resulting loss can't be set off against other heads
Joint borrowers
If you and your spouse are co-owners and co-borrowers, each can claim within their own limits under the old regime.
Which regime?
It depends on your total deductions. Run both calculations every year.
Plan your EMI with our home loan EMI calculator.
Interest during construction
For a self-occupied home under the old regime, interest paid before possession can be claimed in five equal instalments starting from the year of completion, within the overall ₹2 lakh limit.
Principal and stamp duty under Section 80C
Principal repayment, stamp duty and registration are eligible in the year paid, within the ₹1.5 lakh limit shared with other 80C investments.
Selling soon after buying
If you sell a house within five years of the end of the financial year in which you took possession, deductions claimed under Section 80C for principal can be reversed.
Example
A couple, both co-owners and co-borrowers under the old regime, paying ₹30 lakh interest a year on a self-occupied home can each claim up to ₹2 lakh, so ₹4 lakh in total.
Frequently asked questions
Can I claim HRA and home loan benefits together? In some situations, such as working in a different city from the house, yes. Take a chartered accountant's advice.
General information, not tax advice.
