Home Loan Tax Benefits 2026: Section 80C, 24(b) and More
29 September 2026
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Buying a home is one of the biggest financial decisions you will make — and a home loan comes with valuable tax benefits that reduce your overall cost. Here is a simple guide to the home loan tax benefits available to individuals in India.
1. Section 80C — deduction on principal repayment
The principal part of your EMI qualifies for a deduction of up to ₹1.5 Lakh per year under Section 80C. Stamp duty and registration charges paid in the year of purchase can also be claimed within this limit.
Note: The ₹1.5 Lakh limit is shared with PPF, ELSS, life insurance premiums, EPF and other 80C investments.
2. Section 24(b) — deduction on interest paid
| Property type | Maximum interest deduction |
|---|---|
| Self-occupied house | Up to ₹2 Lakh per year |
| Let-out (rented) house | Full interest (loss set-off against other income capped at ₹2 Lakh per year) |
For an under-construction property, interest paid before possession can be claimed in 5 equal instalments starting from the year construction is completed (within the overall limit).
3. Joint home loan — double the benefit
If you take a home loan jointly with your spouse and both are co-owners and co-borrowers, each of you can claim:
- Up to ₹1.5 Lakh under Section 80C, and
- Up to ₹2 Lakh under Section 24(b)
That means a couple can together claim up to ₹7 Lakh in deductions every year.
4. Old tax regime vs new tax regime
- Old regime: You can claim Section 80C and Section 24(b) for a self-occupied home.
- New regime: Deductions under Section 80C and 24(b) for a self-occupied property are not allowed. Interest on a let-out property can still be deducted from rental income.
If your home loan interest and 80C investments are high, the old regime may save you more. Compare both before filing your return.
Example
Ravi pays ₹2,40,000 interest and ₹1,10,000 principal in a year on a self-occupied home and is in the 30% tax bracket (old regime):
- Interest deduction: ₹2,00,000
- Principal deduction: ₹1,10,000
- Tax saved: about ₹96,700 (including cess)
Frequently Asked Questions
Can I claim tax benefits on two home loans? Yes. You can claim interest on more than one house, but the ₹2 Lakh cap applies to the total for self-occupied properties.
What if I sell the house within 5 years? The 80C deductions claimed earlier are reversed and added to your income in the year of sale.
Tax rules can change every Budget — please confirm with a tax advisor before filing.
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