Tax Deductions Available on Home Loans in India
Buying a home is one of life's biggest milestones. To encourage homeownership, the Income Tax Act provides attractive tax deductions on both the interest and principal components of your home loan EMIs under the old tax regime.
1. Section 24(b) - Interest Deduction
You can claim up to ₹2,00,000 per financial year on the interest paid towards a self-occupied property. If the property is rented out, the entire interest can be claimed as a deduction against rental income subject to overall loss limits.
2. Section 80C - Principal Repayment
The principal portion of your EMI qualifies for tax deduction under Section 80C up to a cumulative limit of ₹1,50,000 per year. Stamp duty and registration charges paid during property purchase are also deductible under this section.
Joint Home Loan: Double Your Tax Exemption
If you take a home loan jointly with your spouse or family member and both are co-owners, each co-borrower can independently claim up to ₹2 Lakh on interest and ₹1.5 Lakh on principal, doubling your household tax relief to up to ₹7,00,000 annually!