If you recently took out a loan to purchase a home, you may be eligible for tax savings on the interest you pay. According to Section 24, the deduction will be allowed under the heading "Income from house property." But how to claim interest on home loan in ITR 1? You can claim it by following the steps I shared below.
Steps to Claim Interest on Home Loan Reduction in ITR 1
When filing ITR‑1 with a home loan, the primary deduction you can claim is the interest paid during the financial year. This falls under Section 24(b) for a self‑occupied property, and the maximum allowable deduction is Rs 2 lakh per year.
Log in to the Income Tax e‑filing portal.
Select “File Income Tax Return.”
Choose the applicable Assessment Year and “ITR‑1 (SAHAJ)” form.
Ensure your total income mix is eligible. ITR‑1 allows only salary, single house property, and interest income (not business/professional income).
In the ITR‑1 form, locate the “Income from House Property” section.
For a self‑occupied home, report the interest paid (not principal) in “Interest payable to banks/financial institutions”. The form automatically computes the deduction, capped at Rs 2 lakh.
If your property is rented out, the interest may be claimed in full; otherwise, for self‑occupied properties, the Rs 2 lakh limit applies.
Remember, principal repayment is not entered here but claimed separately under Section 80C in the “Deductions” section, up to a total limit of Rs 1.5 lakh.
Once you've filled in the interest and principal amounts, proceed with the rest of the form, verify, and e‑file your return.
Always retain your loan certificate and interest certificate from the lender. These may be required if the IT department issues a notice later. I hope you found these steps helpful.
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How to Claim Interest on Home Loan in ITR 1?
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2025-07-15T07:50:40+00:00 2025-07-15T07:50:41+00:00Comment
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