Tax Benefits on Home Loans

A home loan doesn't just make ownership possible — it also opens the door to meaningful tax savings. These deductions lower your taxable income and ease cash flow along the way.

Here's a look at the principal tax benefits available to individuals who've taken a housing loan for residential property from a recognised financial institution:

Under Section 24 of the Income Tax Act:
Interest paid on a loan used to acquire, construct, repair, renew, or reconstruct a property qualifies for a deduction of up to ₹2,00,000 per financial year. This applies to both self-occupied and let-out properties — and notably, there's no cap on the interest deduction where the property is rented out.

Under Section 80C of the Income Tax Act:
Principal repayment made during the financial year is deductible up to ₹1,50,000, and this section also extends to stamp duty, registration fees, and other costs incurred while transferring the property into your name. Keep in mind that all of these fall within the same overall ₹1,50,000 ceiling under Section 80C, and the deduction excludes any spending on additions, alterations, renovations, or repairs carried out after the completion certificate has been issued.

Taken together, these provisions can meaningfully lower your tax liability — easing the burden of repayment while you build equity in your new home.