Home loan tax benefits
A home loan is one of the most tax-efficient debts you can hold in India. Both principal and interest components qualify for deductions under different sections of the Income Tax Act. Here's exactly how much you can claim in FY 2025-26.
Last updated: 15 June 2025
Deductions under old tax regime
| Section | What is deductible | Annual cap |
|---|---|---|
| 80C | Principal repayment | ₹1.5 lakh |
| 24(b) | Interest on self-occupied property | ₹2 lakh |
| 24(b) | Interest on let-out property | No cap (subject to ₹2 lakh loss set-off) |
| 80EE | Extra interest for first-time buyers | ₹50,000 (loans ≤ ₹35 lakh) |
| 80EEA | Interest on affordable housing | ₹1.5 lakh (property ≤ ₹45 lakh) |
New tax regime treatment
Under the new tax regime, home-loan interest deduction on self-occupied property is not available. Interest on let-out property is deductible, but the resulting loss cannot be set off against other heads. Most home-loan borrowers therefore stay on the old regime.
Joint home loan tax benefits
Each co-borrower who is also a co-owner can independently claim ₹1.5 lakh under 80C and ₹2 lakh under 24(b), effectively doubling the deduction for a couple. Both must be actively contributing to EMIs.
Stamp duty deduction
Stamp duty and registration charges paid at the time of buying a property are one-time deductible under Section 80C in the year of payment, within the ₹1.5 lakh overall cap.