Home Loan Tax Benefit Calculator
Tax saved via 24(b) interest and 80C principal deductions.
Tax saved in year 1
₹87,238
Old tax regime, self-occupied property: interest deductible up to ₹2,00,000 u/s 24(b), principal up to ₹1,50,000 u/s 80C (shared with other 80C items). The new regime offers neither for self-occupied homes. Savings include 4% cess.
How home loan tax deductions work
Under the old regime, a self-occupied home lets you deduct up to ₹2 lakh of interest a year under Section 24(b) and up to ₹1.5 lakh of principal repayment under Section 80C (sharing the cap with PF, ELSS and insurance). In a loan's early years interest dominates the EMI, so buyers often use the full ₹2L interest cap — for a 30% slab taxpayer, that alone is ₹62,400 a year with cess.
New regime vs old regime for home buyers
The new regime doesn't allow 24(b) or 80C for a self-occupied home, so a large home loan is one of the few situations where the old regime can still win. Compare: your total old-regime deductions (home loan + 80C + HRA) need to outweigh the new regime's lower slab rates. A let-out property's interest remains deductible in both regimes against rental income, with set-off limits.
Frequently asked questions
Can both co-borrowers claim the deduction?
Yes — if both are co-owners and actually pay EMIs, each can claim up to ₹2L interest and ₹1.5L principal separately, effectively doubling the household's tax benefit.
Is there an extra deduction for first-time buyers?
Sections 80EE/80EEA offered extra interest deductions for loans sanctioned in specific past years — they haven't been extended for new sanctions. Check with a CA if your loan predates the cut-offs.
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