In India, home loans offer significant tax benefits under the old tax regime, aiding borrowers in reducing their taxable income. These benefits are primarily available under Sections 80C and 24(b) of the Income Tax Act. Under Section 80C, borrowers can claim a home loan income tax rebate of up to Rs. 1.5 lakh per annum on the principal amount repaid towards the home loan.
What is the Income Tax Rebate on Home Loan?
This deduction encompasses other eligible investments and expenses, such as life insurance premiums, Employee Provident Fund (EPF), and Public Provident Fund (PPF). It's important to note that this benefit is available only after the construction of the house is complete and possession is taken.
Section 24(b) allows for a deduction of up to Rs. 2 lakh per annum on the interest paid for a self-occupied property. For properties that are let out, the entire interest amount is deductible without any upper limit.
However, the maximum loss that can be set off under the head "Income from House Property" is capped at Rs. 2 lakh per annum, with the remaining loss carried forward for up to eight assessment years.
In the case of joint home loans, each co-borrower can individually claim deductions under Sections 80C and 24(b), provided they are co-owners of the property and contribute to the loan repayment.
This means a combined deduction of up to Rs. 3 lakh on principal and Rs. 4 lakh on interest can be availed. Interest paid during the pre-construction period is also eligible for deduction. This amount can be claimed in five equal installments starting from the year in which the construction is completed or possession is taken.
These tax benefits are applicable only under the old tax regime. The new tax regime does not offer deductions under Sections 80C and 24(b).
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What Is The Tax Rebate Available On A Home Loan?
annu
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7 months
2025-05-21T12:27:20+00:00 2025-05-22T16:51:36+00:00Comment
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