Under the new tax regime, the Section 24(b) deduction on interest for a self-occupied property is not available, and neither is the Section 80C deduction on principal. Most pages on this topic still describe the old-regime position as though it were current. If you are on the new regime — which is now the default — your home loan carries no income tax benefit on a self-occupied house. Work out which regime leaves you better off with the income tax calculator before you let a tax deduction influence the loan decision at all.
| Section 24(b) cap, self-occupied, old regime | ₹2,00,000 per year |
|---|---|
| What it means | Not available under the new regime for a self-occupied property. |
| 80C on principal | ₹1.5 lakh — Old regime only; shared with all other 80C claims |
| Repairs / renovation | ₹30,000 — Sub-limit within 24(b), not ₹2 lakh |
| Pre-construction interest | 1/5th per year — From the year construction completes |
as of 2026-08-17 · Income Tax Act, Section 24 · verified
What to know
The distinction that decides the answer is self-occupied versus let-out. For a let-out property the interest deduction is not capped at ₹2 lakh in the same way, though the loss that can be set off against other heads of income is limited, with the remainder carried forward. For a self-occupied property under the old regime, ₹2 lakh is the ceiling regardless of how much interest you actually paid.
Because the deduction is capped and, on the new regime, absent, the interest rate does more for your finances than the tax treatment does. A cheaper loan beats a deductible expensive one. Compare the market in our table of home loan interest rates, check the shortlist at best home loans, and price the difference in rupees with the EMI calculator.
For joint loans, both borrowers can claim the limits individually — but only if each is both a co-owner of the property and a co-borrower on the loan. Adding a spouse to the loan without adding them to the title achieves nothing at all. This is the most common and most expensive error on this topic.
If your existing loan was taken at a materially higher rate, moving it is usually worth more than any deduction on this page. The arithmetic — including the fresh processing fee and its GST — is in home loan balance transfer.
Frequently asked questions
Can I claim home loan interest under the new tax regime?
Not for a self-occupied property — the Section 24(b) deduction is not available under the new regime, and nor is the 80C deduction on principal. The treatment differs for a let-out property. Since the new regime is the default, check which regime you are actually on before assuming a benefit.
How much tax benefit do I get on a home loan?
Under the old regime, up to ₹2 lakh a year of interest under Section 24(b) for a self-occupied property, and principal repayment within the ₹1.5 lakh Section 80C limit — which you are probably already using for EPF, insurance premiums and ELSS. Under the new regime, nothing on a self-occupied property.
Both my spouse and I are on the loan. Can we both claim?
Yes, each within their own limits — but only if both of you are co-owners of the property and co-borrowers on the loan, and each claims in proportion to your share. Being a co-borrower without being a co-owner gives you no deduction.
Sources
- Income Tax Department, Government of India — Section 24 — deductions from income from house property (primary source)
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