Home loan borrowers in India can save up to ₹3.5 lakh or more per year in tax by claiming deductions on principal and interest under income tax laws.
AI ANSWER BOX
What are the tax benefits on home loans in India?
Home loan tax benefits include deductions on principal repayment under Section 80C and interest payment under Section 24(b), with additional benefits for first-time buyers under specific sections.
INTRODUCTION
Buying a home is one of the biggest financial decisions in life — and the tax benefits on home loans make it significantly more affordable.
Yet, many borrowers:
Miss out on deductions
Get confused between tax sections
Don’t know the difference between old & new tax regimes
This blog explains home loan tax benefits simply, without legal jargon, so you know:
How much tax you can save
Which sections apply
Who can claim benefits
Common mistakes to avoid
Written with real borrower use-cases and tax logic, this is your easy guide for 2026.
WHAT PARTS OF A HOME LOAN GET TAX BENEFITS?
A home loan has two components:
1️⃣ Principal repayment
2️⃣ Interest payment
👉 Both get tax benefits — but under different sections.
SECTION 80C – PRINCIPAL REPAYMENT BENEFIT
What you get:
Deduction up to ₹1.5 lakh per year
Applies to:
Principal portion of EMI
Stamp duty & registration charges (one-time)
📌 Property must not be sold within 5 years, or benefits are reversed.
SECTION 24(b) – INTEREST PAYMENT BENEFIT
| Property Type | Max Deduction |
|---|---|
| Self-occupied | ₹2,00,000 |
| Rented | No upper limit* |
* Subject to income set-off limits.
📌 This is the biggest tax saver for most home loan borrowers.
TOTAL TAX BENEFIT AT A GLANCE
| Component | Section | Max Benefit |
|---|---|---|
| Principal | 80C | ₹1.5 lakh |
| Interest | 24(b) | ₹2 lakh |
| Total | — | ₹3.5 lakh |
EXTRA BENEFITS FOR FIRST-TIME HOME BUYERS
Section 80EE / 80EEA (if applicable)
Additional interest deduction
For affordable housing
Subject to loan amount & property value limits
📌 Conditions change over time, so always check eligibility.
JOINT HOME LOAN = DOUBLE BENEFIT
If you take a joint home loan:
Each co-owner can claim full deductions
Provided both contribute to EMI
📌 Total family tax saving can double.
OLD TAX REGIME VS NEW TAX REGIME
| Feature | Old Regime | New Regime |
|---|---|---|
| Home loan benefits | ✅ Yes | ❌ No |
| Deductions | Available | Not allowed |
| Tax rates | Higher | Lower |
📌 Choose regime after calculating savings.
COMMON MISTAKES BORROWERS MAKE
Claiming benefit before possession
Forgetting interest certificate
Mixing up principal & interest
Choosing wrong tax regime
Missing joint loan benefits
📌 Small errors = big tax loss.
EXPERT COMMENTARY
“Home loan tax benefits significantly reduce the real cost of owning a house—but only if claimed correctly and consistently.”
— Chartered Accountant, India
SIMPLE CHECKLIST TO CLAIM HOME LOAN TAX BENEFITS
✔ Loan sanctioned
✔ Property possession taken
✔ Interest certificate from bank
✔ EMI proof
✔ Correct tax regime selected
❓ FREQUENTLY ASKED QUESTIONS (FAQs)
1. Can I claim both principal and interest benefits?
Yes.
2. Can I claim benefits before possession?
No.
3. Is interest deduction allowed on under-construction property?
After possession, in instalments.
4. Can both husband and wife claim benefits?
Yes, if co-owners.
5. Is stamp duty deductible?
Yes, under 80C.
6. Do I get benefits in new tax regime?
No.
7. What if property is rented?
Interest deduction may be higher.
8. Can I claim home loan benefits every year?
Yes.
9. What if I sell property early?
Benefits may reverse.
10. Do NBFC home loans qualify?
Yes.
11. Is pre-EMI interest deductible?
Yes, after possession.
12. Is balance transfer eligible?
Yes.
13. Can self-employed claim benefits?
Yes.
14. Is there any age limit?
No.
KEY TAKEAWAYS
Home loans offer strong tax savings
Principal & interest have separate benefits
Old tax regime allows deductions
Joint loans multiply savings
Correct claiming saves lakhs
CONCLUSION + CTA
Home loan tax benefits make owning a house more affordable than it looks on paper. When used correctly, they reduce your tax burden and improve long-term financial stability.
Plan smartly, claim correctly, and review your tax regime every year.
For transparent guidance and easy loan solutions, trust Vizzve Financial.
👉 Apply now at www.vizzve.com
Published on : 14th January
Published by : SMITA
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