Sec 24 of Income Tax Act allows a deduction on interest paid on borrowed capital used for residential property, including when a personal loan is used to buy, build, renovate, or repair your home.
For a self-occupied property, you can claim up to Rs. 2,00,000 per year as a deduction on the interest paid, if the loan is used for purchase or construction.
For renovation or repair, there’s a smaller limit: you can claim up to Rs. 30,000 annually on the interest component.
If the property is let out, there is no cap on the interest you can claim under Section 24(b), but there’s a maximum loss set-off limit of Rs. 2,00,000 per year against other income; any unabsorbed loss can be carried forward for 8 years.
You must prove that the personal loan was used for the property-related purpose by submitting invoices, receipts, bank statements, or other documents.
Deduction under Section 24(b) is allowed only on the interest, not on the principal repayment.
If you opt for the new tax regime, these deductions may not be available; typically such benefits apply under the old income-tax regime.
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What is Section 24 Income Tax Benefit on Interest on Personal Loan?
shivam
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2025-11-24T19:28:02+00:00 2025-11-24T19:28:04+00:00Comment
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