Tax Benefits on Home Loans: Section 24, 80C, and 80EEA
Quick Answer
Under the Old Tax Regime, you can claim up to ₹1.5 lakh on the principal repayment under Section 80C and up to ₹2 lakh on the interest paid under Section 24(b). If renting out the property, the entire interest can be claimed as a deduction.
Interest Deduction under Section 24(b)
Section 24(b) allows you to deduct the interest portion of your home loan EMI from your taxable income. For a self-occupied property, the maximum deduction is capped at ₹2,00,000 per financial year.
If you have rented out the property, there is no upper limit on the interest deduction you can claim, although the loss from "Income from House Property" that can be set off against other income heads is capped at ₹2 lakh.
Principal Repayment under Section 80C
The principal component of your EMI is eligible for deduction under Section 80C, within the overall limit of ₹1.5 lakh. To claim this, you must not sell the property within 5 years of taking possession, or the deduction will be reversed.
Note: These benefits are only available under the Old Tax Regime. The New Tax Regime does not allow deductions for home loan interest or principal for self-occupied properties.
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