The two main deductions
- Section 24(b), interest: up to ₹2,00,000 per financial year for a self-occupied property under the old tax regime.
- Section 80C, principal: principal repaid counts within the overall ₹1,50,000 limit shared with PPF, ELSS, life insurance and similar investments.
These deductions are generally not available under the new tax regime. Rules and limits change; confirm current rules before you plan around them.
A worked example
For a ₹50 lakh loan at 8.5% for 20 years, the first financial year's interest is about ₹4,21,182 and principal about ₹99,511. In the 30% slab with no other 80C investments, the estimated tax saving that year is about ₹93,448 (including 4% cess).
Our calculator shows this year by year for your own loan, with your slab and the 80C you already use.
Good to know
- Deductions follow the financial year (April to March), not your loan year.
- Co-borrowers who are co-owners can each claim their own share, subject to limits.
- Keep the lender's interest certificate; it is the document you need.
- This is general information, not tax advice. Consult a chartered accountant.
Frequently asked questions
Can I claim both Section 24(b) and 80C on a home loan?
Under the old tax regime, interest and principal are claimed under separate sections, each with its own limit. Eligibility depends on your situation; consult a chartered accountant.