Buying a home isn’t just about building a future — it can also help you save significantly on taxes. If you’ve taken a home loan in India, two key sections of the Income Tax Act — Section 80C and Section 24(b) — allow you to claim deductions on your principal and interest repayments. But how do you actually claim these benefits while filing your taxes?
Let’s break it down in simple, actionable steps.
Understand What You Can Claim
Before diving into the process, here’s a quick refresher:
- Section 80C: You can claim up to ₹1.5 lakh per year on the principal amount repaid on your home loan.
- Section 24(b): You can claim up to ₹2 lakh per year on the interest paid on your home loan — provided the property is self-occupied.
These deductions reduce your taxable income, which means you end up paying less tax.
Step-by-Step: How to Claim These Deductions
1. Get Your Loan Statement from the Lender
Ask your bank or NBFC (like Easy Home Finance) for your home loan interest certificate or annual statement. This document shows:
- Total principal repaid
- Total interest paid
- Loan account details
You’ll need this to fill in the correct numbers during tax filing.
2. Check Eligibility Conditions
To claim deductions under Section 80C, make sure:
- The property is not sold within 5 years of possession. If it is, the tax benefits will be reversed.
- You’ve paid the principal amount during the financial year.
For Section 24(b):
- The loan must be for purchase or construction (not renovation).
- Construction should be completed within 5 years from the end of the financial year in which the loan was taken.
- Only interest paid after possession is eligible for deduction.
3. Declare It to Your Employer (if salaried)
If you’re a salaried individual, submit your home loan documents to your employer before the end of the financial year (usually by January or February). This helps them adjust your TDS (tax deducted at source) correctly.
Missed this step? No worries — you can still claim it directly while filing your Income Tax Return (ITR).
4. Enter Details in Your Income Tax Return
While filing your taxes:
- Under the Deductions section (Chapter VI-A), claim the principal amount under Section 80C.
- Under the Income from House Property section, mention the interest amount to claim under Section 24(b).
- If your property is rented out, there is no limit on the interest deduction (although loss from house property set-off is capped at ₹2 lakh).
5. Keep All Proofs Handy
You don’t have to submit hard copies to the IT department while e-filing, but keep records for at least 6 years, just in case your return gets scrutinized later. Keep:
- Loan certificate
- Possession letter or completion certificate
- Payment receipts (especially for pre-EMI or partial payments)
Bonus Tip: Don’t Forget Joint Loans
If you’ve taken a joint home loan (say with a spouse), both co-borrowers can claim separate deductions on their individual incomes — up to ₹1.5 lakh each under 80C and ₹2 lakh each under 24(b), provided both are co-owners and co-payers.
Final Thoughts
Claiming home loan tax benefits under Section 80C and 24(b) doesn’t have to be complicated. Just keep your paperwork ready, file carefully, and take full advantage of what the government offers. Every rupee saved in taxes gets you one step closer to financial freedom.
Want to Begin?
Apply for a Home Loan with Easy Home Finance: https://easyhomefinance.in/site/apply
Check Your Eligibility Instantly: https://easyhomefinance.in/loan
Learn More About Our 100% Digital Process: https://www.easyhomefinance.in
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