Tax Benefits on Home Loans in India: Section 80C & 24b

Note: This content is specific to the Indian Income Tax system.

In India, taking a Home Loan is one of the most efficient ways to save tax. The Income Tax Act provides generous deductions for both the principal repayment and the interest paid.

If you are a salaried employee or self-employed individual in India, you need to know these two sections:

Section 80C: Principal Repayment

You can claim a deduction for the principal component of your EMI.

• Limit: ₹1.5 Lakhs per financial year.
• Caveat: This ₹1.5L limit is shared with other investments like PPF, EPF, LIC, and ELSS. If you already max out 80C with other savings, the home loan principal won't give you additional benefit.
• Lock-in: You cannot sell the house within 5 years of purchase, or the deductions will be reversed.

Section 24(b): Interest Payment

You can claim a deduction for the interest component of your EMI.

• Self-Occupied Property: Max deduction of ₹2 Lakhs per financial year.
• Let-Out Property: No upper limit on interest deduction (though set-off against other income is capped at ₹2 Lakhs).

The "Joint Loan" Hack

If you buy the property jointly with your spouse and both are co-borrowers:

• Double Deduction: Both of you can claim separate ₹1.5L (80C) and ₹2L (24b) deductions.
• Total Family Benefit: Up to ₹7 Lakhs deduction from taxable income per year.

This makes joint home loans extremely tax-efficient for working couples.

👉 India Home Loan Tax Calculator