Home loan tax deductions at a glance (self-occupied house)
| What | Old regime | New regime |
|---|---|---|
| Interest paid | Up to ₹2,00,000 | Nil |
| Principal repaid (with PF, PPF, insurance…) | Up to ₹1,50,000 in total | Nil |
| Stamp duty and registration (year paid) | Within the same ₹1,50,000 | Nil |
| Joint loan | Each co-owner borrower claims their own limits | Nil |
Worked example: does the home loan change your best regime?
₹15 lakh gross salary, ₹2.5 lakh interest and ₹1.2 lakh principal this year, age below 60:
| Your other deductions | Old regime tax | New regime tax |
|---|---|---|
| Home loan + ₹50,000 other 80C | ₹1,48,200 | ₹97,500 |
| 80C full + ₹2 lakh other deductions | ₹96,200 | ₹97,500 |
| 80C full + ₹3 lakh other deductions | ₹75,400 | ₹97,500 |
The lower tax in each row is in bold. The home loan alone saves ₹93,600 under the old regime, but that matters only if the old regime ends up cheaper overall. Check your full picture, including HRA and other deductions, in the income tax calculator.
Assumptions
- Resident individual, FY 2026-27 slabs and limits (unchanged by Budget 2026), standard deduction and 4% cess included.
- The house is self-occupied and construction is complete.
- "Estimate" adds up the interest and principal in your next 12 EMIs from the loan details; your lender's certificate will differ slightly if your rate changed or you prepaid.
- This is a guide, not tax advice. Confirm your claim with a tax adviser.
Frequently asked questions
What tax benefits do I get on a home loan?
For a house you live in, under the old regime: interest paid up to ₹2 lakh a year is deductible, and principal repaid counts towards the ₹1.5 lakh limit for 80C investments (shared with PF, PPF, insurance and the like). Stamp duty and registration charges also count under 80C in the year you pay them. The new regime gives no deduction for a self-occupied house.
Should I choose the old or new regime if I have a home loan?
For many people the new regime still wins, even with a home loan, because its slab rates are lower. The old regime wins only when your total deductions are large. For example, on a ₹15 lakh salary with ₹2.5 lakh of home loan interest, it takes a full 80C and about ₹2 lakh more in deductions such as HRA, health insurance and NPS. The calculator works out both for your figures.
Can both co-borrowers claim the tax benefit on a joint home loan?
Yes, if each is a co-owner of the house and a co-borrower on the loan. Each claims their own share of interest (up to ₹2 lakh each) and principal (within their own ₹1.5 lakh 80C limit), so a joint loan can double the total benefit. The shares should match how each contributes to the EMIs.
What about interest paid before construction is complete?
Interest for the period before you get possession isn't deductible in those years. It is claimed in five equal parts starting from the year construction is completed, within the same ₹2 lakh yearly limit for a self-occupied house. If construction isn't completed within five years from the end of the year the loan was taken, the limit falls to ₹30,000.
What if the house is rented out?
Interest on a let-out house is deducted from its rent with no ₹2 lakh cap, in both regimes. Under the old regime, if the result is a loss, up to ₹2 lakh of it can be set off against your other income and the rest carried forward for 8 years. The new regime doesn't allow that set-off. This calculator covers a self-occupied house only.
What if I sell the house within five years?
If you sell within five years from the end of the year you got possession, the principal deductions you claimed under 80C are reversed and added to your income in the year of sale. The interest deductions are not reversed.
Where do I get my interest and principal figures?
Your lender issues a provisional interest certificate during the year and a final one after 31 March. Give the provisional one to your employer so less tax is deducted, and use the final one when filing your return. Choose 'I have them' in the calculator to enter its figures.