ITR Filing FY 2024-25: 5 Smart Home Loan Tax Benefits Every Taxpayer Should Know
Filing your Income Tax Return (ITR) for FY 2024-25 offers an important opportunity to claim attractive tax benefits on your home loan. Understanding these benefits can help reduce your taxable income and save substantial tax amount. Here are the 5 smart home loan tax benefits every taxpayer should know for effective tax planning:
1. Deduction on Principal Repayment Under Section 80C
Under Section 80C, you can claim a deduction of up to ₹1.5 lakh per annum on the principal amount repaid towards your home loan. This includes EMI principal components and also registration and stamp duty charges paid during the year of purchase. This benefit applies only after the construction of the property is complete, and if you sell the property within 5 years, the benefit may be reversed.
2. Deduction on Interest Paid Under Section 24(b)
Section 24(b) allows you to claim a deduction of up to ₹2 lakh per annum on the interest paid on home loans for a self-occupied property. If the property is let-out or rented, there is no upper limit on the interest deduction; losses in this head can be adjusted against other income heads within specified limits. For under-construction properties, interest deduction starts only after construction completion, and construction must be finished within 5 years of the loan start.
3. Additional Deduction for First-Time Homebuyers Under Section 80EEA
First-time homebuyers can claim an additional deduction of up to ₹1.5 lakh per annum on interest paid, over and above the ₹2 lakh limit under Section 24(b), if they meet certain conditions — the home loan amount should be less than ₹35 lakh and the property value should not exceed ₹50 lakh.
4. Deduction on Stamp Duty and Registration Charges Under Section 80C
Stamp duty and registration fees paid for the purchase of the property can be claimed under Section 80C within the overall ₹1.5 lakh limit, but only in the year these expenses are incurred. Claiming this benefit restricts selling the property within 5 years, else the deduction gets reversed.
5. Tax Benefits for Joint Home Loan Borrowers
If a home loan is taken jointly by two or more co-borrowers who are also co-owners, each borrower can claim deductions separately on principal repayment (under Section 80C) up to ₹1.5 lakh and interest paid (under Section 24(b)) up to ₹2 lakh each, provided they pay their share of EMIs and own the property jointly.
Frequently Asked Questions (FAQ)
Can I claim tax benefits on home loan principal before the property construction is complete?
No, principal repayment deduction under Section 80C is available only after construction of the property is complete.
What happens if I sell my property within 5 years of purchase?
The tax benefits claimed under Section 80C and on stamp duty/registration charges will be reversed and added back to your taxable income.
Is there any limit on interest deduction for rented properties?
No upper limit on interest deduction is applicable for let-out or rented properties, unlike self-occupied properties where the limit is ₹2 lakh.
Can I claim home loan tax benefits if I am a co-borrower?
Yes, if you are a co-borrower and co-owner, you can claim deductions on both principal and interest paid according to your share.
Are the home loan tax benefits available under both old and new tax regimes?
Home loan benefits under the old tax regime remain available as specified. The new tax regime significantly restricts certain deductions, including those under Sections 80C and 24(b) for self-occupied properties.
Published on: July 27, 2025
Published by: Selvi
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