How your home loan helps you save more than just rent.
Buying a home is one of the biggest financial steps most of us take — and thankfully, it also comes with some generous perks. If you’re repaying a home loan in India, you’re likely eligible for tax benefits that can ease your burden and boost your savings each year.
Think of it this way: while you’re building equity in your dream home, the government is helping you lower your taxable income. Here’s a simplified breakdown of the key home loan tax benefits you should know — and how to make the most of them.
1. Save on Principal Repayment with Section 80C
When you repay the principal amount of your home loan, you can claim a deduction of up to ₹1.5 lakh per year under Section 80C of the Income Tax Act.
This benefit is available whether you’ve bought a ready-to-move-in home or a property under construction — as long as the construction is completed within five years.
The only catch? If you sell the home within five years, the deduction claimed gets reversed. So, this benefit is really designed to encourage long-term ownership.
2. Get Relief on Interest Payments with Section 24(b)
This one’s a big win for most borrowers. Under Section 24(b), you can claim up to ₹2 lakh per year on the interest portion of your home loan EMI — provided the property is self-occupied.
If your home is rented out or vacant, there’s actually no cap on the interest deduction — a great bonus for real estate investors.
And if your home is still under construction? You can still claim pre-construction interest, but it gets divided into five equal parts and claimed after possession.
3. First-Time Buyer? You Could Save Even More
If you’re buying your first home, the government gives you extra benefits to make housing more affordable.
Depending on when your loan was sanctioned, you may be eligible for:
- Section 80EE: Up to ₹50,000 deduction on interest (in addition to ₹2 lakh under Section 24), if your loan was sanctioned between April 2016 and March 2017.
- Section 80EEA: Up to ₹1.5 lakh extra on interest for loans sanctioned between April 2019 and March 2022, especially for homes under ₹45 lakh.
You can’t claim both, but either one can help you reduce your EMI burden and save on income tax.
4. Double the Benefits with a Joint Home Loan
Taking a joint home loan? Great move — because both co-borrowers (if they’re also co-owners) can claim tax deductions separately.
Here’s what that looks like:
- ₹1.5 lakh each under Section 80C (for principal)
- ₹2 lakh each under Section 24(b) (for interest)
That’s a total of ₹7 lakh in combined deductions. Ideal for couples, siblings, or parent-child co-applicants who want to maximise savings while sharing responsibility.
5. What You Need to Claim These Benefits
Claiming home loan deductions is simple — you’ll just need:
- An interest certificate from your lender showing the EMI breakup
- Details of your loan sanction date, property possession, and ownership
- To choose the old income tax regime, since these deductions aren’t available under the new regime
If you’re using a CA or tax filing software, just enter the values under the relevant sections: 80C, 24(b), and 80EE/80EEA if applicable.
Wrapping Up: Your Home Loan Can Help You Save Big
Paying EMIs can feel like a commitment — but it’s also an opportunity. Thanks to the tax system, your home loan helps you save thousands (or lakhs) every year, while you continue building your most important asset: your home.
With the right loan structure, and a digital-first lender like Easy Home Finance, you can take full advantage of every tax break — without the usual paperwork stress.
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