Taking a home loan not only helps you buy a house but also offers significant tax benefits. Under the old tax regime, borrowers can claim deductions on both principal and interest payments.
The principal repayment qualifies for a deduction of ₹1.5 lakh per year under Section 80C, reducing taxable income. Meanwhile, the interest paid on the loan is eligible for a deduction of ₹2 lakh per year under Section 24(b) for self-occupied properties.
For those with joint home loans, each borrower can individually claim these deductions, doubling the tax-saving potential. Additionally, if the property is rented out, the interest deduction has no upper limit, allowing borrowers to offset rental income against loan interest.
However, under the new tax regime, these deductions are not available, making it crucial to evaluate which tax structure benefits you more.
The government has also extended tax benefits to two self-occupied properties, making homeownership more affordable. If the loan is taken for an under-construction property, interest paid during the construction phase can be claimed in five equal installments after possession.
By leveraging these tax benefits, homebuyers can significantly reduce their tax burden while investing in real estate. Choosing the right tax regime and structuring the loan wisely can maximize savings.
