Our Products
Loans
Cards
Insurance
Investment
Stock Market
Electronics Mall
CIBIL Score
Knowledge Centre
Calculators
Our Services
My Account
Do not call
En
The Indian government offers tax benefits on home loans to encourage citizens to purchase real estate. These exemptions encourage you to invest and save, making homeownership affordable and convenient, while also boosting the real estate sector. Provisions like Section 80C, Section 24 and Section 80EE have been laid down under the Income Tax Act of 1961, to claim deductions on home loans.
The home loan tax benefits under the applicable sections of the Income Tax Act of 1961 are listed below:
| Provisions of the Income Tax Act | Maximum Deductible Amount |
|---|---|
Section 24 |
₹2 Lakhs |
Section 80C |
₹1.5 Lakhs |
Section 80EE |
₹50,000 |
Section 80EEA |
₹1.5 Lakhs |
*Disclaimer: These are subject to change as per the revisions made in the Union Budget. Verify the details from the Income Tax Department of India’s official portal.
Here are the details:
You can get an exemption of up to ₹1.5 Lakhs every year under this section
You cannot sell the house for at least 5 years since possession, to claim the tax benefits on a home loan
If you sell the home within 5 years, the deductions shall be reversed. These will be counted as income for the year in which the sale is made.
You can enjoy tax deductions on home loans taken for the purchase or construction of a new residential property
You can get tax deductions on the repaying the interest component of your home loan under Section 24:
Section 24 allows you to enjoy deductions on interest of the home loan EMI paid over the year. Under this section, you can enjoy deductions of up to ₹2 Lakhs
The interest paid on a home loan for a rented property also qualifies for a deduction
If the construction of the property is not completed within 5 years, you can claim deductions of up to just ₹30,000
This deduction is available from the year in which the house is constructed
Under this section, you can get an additional deduction as a first-time home buyer.
You can get a deduction of up to ₹50,000 on the interest component of the home loan each year
You can get a deduction over and above the ₹2 Lakhs as available under Section 24(b)
The value of the property must be less than ₹45 Lakhs
If you are not eligible for a deduction u/s 80EE, don’t worry. You can get tax benefits under Section 80EEA:
You can get tax benefits of up to ₹50,000 u/s 80EEA
Home loans taken between April 1, 2016 and March 31, 2017, qualify for the deduction For this, the loan amount should be ₹35 Lakhs or less. Meanwhile, the property’s stamp duty value should not exceed ₹45 Lakhs.
You should not have any residential property registered under your name at the time of loan sanction
Let’s understand the tax benefits you can claim under each regime:
| Sections | Old Regime | New Regime |
|---|---|---|
Section 24 |
Applicable |
Applicable on property let-out for rent |
Section 80C |
Applicable |
Not Applicable |
Section 80EE |
Applicable |
Not Applicable |
Section 80EEA |
Applicable |
Not Applicable |
The process to claim your tax deduction is as follows:
Evaluate the amount you wish to claim as tax deduction
Submit your home loan interest certificate to your employer to amend the TDS
Fill and submit your income tax returns. Mention the applicable deductions in the fields as requested
You can claim deductions of up to ₹50,000 under Sections 80EE/EEA of the Income Tax Act, 1961. Similarly, you can get a tax exemption of up to ₹1.5 Lakhs u/s 80C. Furthermore, you can enjoy home loan tax benefits of up to ₹2 Lakhs under Section 24.
Yes, a top-up home loan is eligible for tax deductions under Sections 80C and 24.
The main applicant who owns the property is eligible for a tax deduction. If the spouse is a co-borrower, he/she is also eligible for tax benefits.
You will not be able to claim tax deductions until the construction is finished. Post-construction, you can claim the total interest paid for the period before gaining possession. This can be claimed in 5 equal instalments from the year the construction is finished.
Yes, if your partner is employed, you can claim separate deductions on your tax forms. You both can get deductions of up to ₹1.5 Lakhs under Section 80C. If the house is jointly owned, each co-owner can claim interest on borrowed money deductions of up to ₹2 Lakhs u/s 24.
Yes, you can enjoy tax benefits on a second home loan. However, do note that you can claim tax exemptions only up to the specified limits as specified in the sections of the Income Tax Act, 1961.
If you sell your home within 5 years, the deductions you received are reversed. Alternatively, it will be considered as income for the years when the income tax is due.
The assessment year and your income are considered when calculating your tax deductions. Also, the interest and principal amount of your home loan plays a major role.
108680
Unlock the world of credit! From picking the perfect card to savvy loan management, navigate wisely.
50694
Money Management and Financial Planning covers personal finance basics, setting goals, budgeting...
25892
Explore the investment cosmos! From beginner's guides to sharp-witted strategies, explore India's treasure trove of options.
35165
Navigate the tax maze with ease! Uncover Income Tax 101, demystify jargon with Terms for Beginners, and choose between Old or New Regimes.
18574
Discover essential insights on various types of insurance in India.
4491
Welcome to Tech in Finance, where we explore the exciting intersection of technology and finance...
Academy 
